Category: Chile

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.

Chile posted a trade surplus of $770 million from April 1 to 15, with exports at $1.97 billion and imports at $1.20 billion. Copper exports stood at $475 million. Chile is the world’s largest copper producer, accounting for one third of global copper output.

Telefónica CTC Chile, the Chilean unit of Spanish telecom giant Telefónica, posted net profit of $14 million for the first quarter, up 127% year-on-year. The company says its stronger performance was due to its success in the broadband market and ability to retain customers, which had previously been a problem for the company.

Chile’s trade surplus stood at $6.1 billion, up 31 percent year-on-year. The leading exports were copper, fresh fruits, cellulose and salmon. Chilean exports to Asia grew 46 percent, exports to the Americas increased 26 percent and sales to Europe rose 16 percent.

Entel, Chile’s second largest telecoms group, posted a net profit of $33 million for the first quarter, up 31 percent year-on-year. The company’s revenue grew to $313 million, up 4.0 percent. In 2004, Entel posted a net profit of $82 million, down 23 percent, due to the underperformance of its foreign subsidiaries. The company operates in Chile, Peru, Venezuela, Central America and the US.

Juan Villarzu, president of Chile’s state-owned copper company Codelco, said the company would benefit from privatization. Villarzu said Codelco needs to make larger investments to meet growing global demand for copper, and it would be better able to make those investments as a private company. CODELCO is considering raising its production from 2.5 million tons of copper per year to 3 million in 2020 to meet increasing demand, especially from China.

The International Monetary Fund is predicting Chile’s GDP will growth 6.1 percent this year, up from its previous estimate of 4.7 percent. The Fund predicted growth of 5.4 percent in 2006 and said Chile’s economy will be boosted by increased exports and foreign investments.

Copper exports from Chile were up 16% year-on-year in March to $ 1.62 billion for a total $3.78 billion in the first quarter. Copper is Chile’s number one export and strong demand, especially from China and the United States, is helping the economy grow at a robust rate. China recently overtook the US and the leading importer of Chilean copper.

Economists expect Chile’s GDP to grown 5.8% this year, according to a poll conducted by the country’s central bank. This figure is slightly less than the government’s projection of 6%. The central bank raised its lending rate to commercial banks 25 basis points last week to 3 percent in a move to control inflation. Chile continues to benefit from strong global demand for copper.