Annual Report 2000 in PDF - Antofagasta plc

Chairman’s ReviewANTOFAGASTA PLC Annual Report 200016Real EstateCity of AntofagastaThe real estate market in Antofagasta is showingsigns of recovery after two years of stagnationduring the recent recession. The FCAB is currentlynegotiating the sale to the government of asmall parcel of land required for a new buildingfor the Courts of Justice. The sale price should bea useful benchmark for valuing prime real estatein the city centre. FCAB has extensive propertiesin the centre of Antofagasta which are currentlyused as marshalling yards, railway workshopsand for storage. The company is studying variousoptions to develop these properties including therelocation of some railway installations outsidethe city.Port of MejillonesThe construction of a modern port in the shelteredBay of Mejillones, has been finally approved afterlong delays. Chile’s state copper company Codelcohas now guaranteed Mejillones 1.3 million tonsof copper related cargo annually. Construction isscheduled to begin in June 2001 and the new port,with three loading berths accessible by both roadand rail, is expected to be operational by the endof 2003.The development of Mejillones will increasedemand for industrial parks, warehouses andstorage facilities and so increase the value ofthe FCAB’s extensive real estate in Mejillones.This totals 98 hectares in two blocks: one of69 hectares adjacent to the port area and theother of 29 hectares within the city limits.Forestry and Real EstateForestal’s lakeside properties in Chile’s TenthRegion have appreciated in value followingthe improvements to the Inter-Lagos highwayfrom Villarica to the south. The 25,000 hectareproperties comprising Releco Puñir andHuilo-Huilo are now more accessible by roadfrom Panguipulli. This will encourage potentialbuyers and developers from other parts of Chileto acquire houses for the summer holidays andweekends in one of the country’s most beautifulregions. The Group’s properties include a12 kilometre stretch of lakeshore with plentifulwater and electricity supply, suitable for villasand travel lodges for fishing holidays and otherrecreational activities.Quiñenco S.A.The Group holds a 33.6% investment in QuiñencoS.A., a leading industrial and financial grouplisted in Santiago and New York with investmentsin Chile, the Southern Cone and Brazil. Quiñenco’sfour main interests are financial services (Bancode Chile and Banco de A Edwards); beveragesand food (CCU, Viña San Pedro and Lucchetti);telecommunications (Telsur and Entel) andmanufacturing (Madeco). In March 2001 Quiñencoacquired control of Banco de Chile, one of thelargest and most profitable banks in the country.Difficult economic conditions persisted in Chileand the Southern Cone during the year andalthough Quiñenco’s consolidated sales increasedby 6.1%, its results to 31 December were adverselyaffected by losses incurred at Madeco resultingfrom its restructuring programme which beganin 1999 but which continued into 2000, and bya net loss on the sale of Lucchetti’s operationsin Argentina. However, Quiñenco’s main operatingcompanies all reported operating profits for theyear indicating a turnaround in their businesses.Unlike 1999, Quiñenco reported no significantextraordinary gains and posted a net loss ofUS$9.8 million for the year. As a consequenceQuiñenco will not pay a dividend for the 2000financial year. Quiñenco’s ADR share pricesuccumbed to the malaise in global marketsand stood at US$6 5 /8 on 31 March, valuingAntofagasta’s investment in Quiñenco atapproximately US$250 million.