Category: Chile

Chile’s state-owned copper producer Codelco issued inflation-linked bonds worth $210 million that are set to mature in 20 years. The yield on the debt is 3.29 percent over inflation, or 24 basis points above a Chilean government bond of similar maturity. The bond will be used to help finance Codelco’s $393 million purchase of Fundicion Ventanas.

Chile’s trade surplus widened to $1.07 billion in April as copper prices surged to 16-year highs. Copper prices have climbed 24% in 12 months, spurred by demand in India and China, the world’s largest consumer of the metal. Chile’s overall exports rose 25% to $3.44 billion, while imports surged 36% to $2.37 billion.

Standard & Poor’s has revised its outlook to negative from stable on Chilean state copper company Codelco’s A+ local currency corporate credit rating. S&P lowered the outlook as a result of the “expected weakening of the company’s financial profile” due to Codelco’s ambitious expansion plans and high dividend distributions. At the same time, S&P confirmed Codelco’s local and A-grade foreign currency corporate credit ratings and maintained the stable outlook on the company’s foreign currency corporate rating.

Chile’s consumer prices rose .9 percent in April, the fastest monthly increase in more than two years after transport costs surged. Chile’s inflation rate rose to 2.9 percent in the twelve months through April. The central bank has increased its benchmark lending rate five times since September when the rate was 1.75 percent, a record low.

Chile’s state-owned copper company Codelco plans to boost investment 25 percent at its largest mine next year to expand output for China, the world’s biggest copper consumer and the company’s number one customer. Spending at Codelco’s northern division will rise to about $1 billion from $800 million this year, part of a plan to increase output almost 22 percent by the end of 2008. Copper prices currently stand at $1.44 a pound, more than double the 14-year low of $.60 a pound in November 2001.

Chilean private copper mining company Minera Escondida posted a net profit of $453 million for the first quarter, up 3% year-on-year. The company’s operating profit rose to $565 million and revenues increased to $823 million from $794 million a year earlier. Escondida, like Chile’s state-owned copper company Codelco, has benefited from strong copper demand in China and the United States.

Chilean airline group Lan reported $46 million in first quarter net profits, down only slightly from $48 million in the March 2004 quarter. The company said increased oil prices added $37 million to its fuel bill, cutting into profits. Operating revenues were up almost a quarter at $608 million and operating expenses rose nearly 30% to $551 million. Lan expects its latest venture, Lan Argentina, to begin flights in the second quarter.

Forestry group Celulosa Arauco, a unit of Chilean conglomerate Empresas Copec, posted a net profit of $127 million for the first quarter of 2005, up 15 percent year-on-year. The unit’s revenue grew to $557 million, up 26 percent. Celulosa Arauco recently announced plans for a $300 million bond issue.

Chile’s state-owned copper giant Corporacion Nacional del Cobre (Codelco) posted a net profit of $389 million for the first quarter of 2005, up 87 percent year-on-year. The company’s revenues rose $396 million to $2.26 billion, boosted by high copper prices. Copper prices on the London Metal Exchange stood at $1.48 per pound on March 31, 2005, up from $1.24 per pound in the same period a year earlier.

Chilean state-owned copper producer Codelco is backing away from the idea of selling stock to the public in a partial privatization. Executive President Juan Villarzú says he has given up on the idea he floated earlier this year, arguing that the government cannot alone finance the company’s multi-billion dollar investment plans. Codelco’s investment plan for the period 2005-2012 will cost $13 billion- $17 billion.