10-QPeriod: Q3 FY2020

FREEPORT-MCMORAN INC Quarterly Report for Q3 Ended Sep 30, 2020

Filed November 6, 2020For Securities:FCX

Summary

Freeport-McMoRan Inc. (FCX) reported a significant turnaround in its financial performance for the third quarter and first nine months of 2020 compared to the same periods in 2019. The company achieved net income attributable to common stockholders of $329 million in Q3 2020, a substantial improvement from a net loss of $207 million in Q3 2019. This positive shift was driven by higher average realized prices for copper and gold, alongside improved sales volumes and lower production and delivery costs. Operationally, FCX highlighted progress in its Grasberg minerals district in Indonesia with the ramp-up of underground mining. The company also announced the completion of the Lone Star copper leach project. Despite the ongoing challenges presented by the COVID-19 pandemic, FCX maintained a strong liquidity position with $2.4 billion in cash and cash equivalents and $3.5 billion available under its revolving credit facility at the end of the quarter. The company also proactively managed its debt, issuing new notes and using proceeds for debt redemptions to extend maturities and strengthen financial flexibility.

Financial Highlights

48 data points
Beta

Revenue

$3.85B

25.5% Gross Margin

Net Income

$329.00M

8.5% Net Margin

EPS (Diluted)

$0.22

Total Assets

$41.10B

Cash & Equivalents

$2.40B

Free Cash Flow

$1.24B

Financial Statements
Beta
Revenue$3.85B
Cost of Revenue$2.87B
Gross Profit$983.00M
SG&A Expenses$72.00M
Operating Expenses$2.97B
Operating Income$880.00M
Net Income$329.00M
EPS (Basic)$0.22
EPS (Diluted)$0.22
Shares Outstanding (Basic)1.45B
Shares Outstanding (Diluted)1.46B

Key Highlights

  • 1Revenue increased to $3.9 billion in Q3 2020 from $3.2 billion in Q3 2019, driven by higher copper and gold prices and increased copper sales volumes.
  • 2Net income attributable to common stockholders was $329 million for Q3 2020, a significant improvement from a net loss of $207 million in Q3 2019.
  • 3Consolidated operating cash flows for the first nine months of 2020 were $1.7 billion, up from $1.3 billion in the prior year period, reflecting cost efficiencies.
  • 4FCX maintained strong liquidity with $2.4 billion in cash and cash equivalents and $3.5 billion in availability under its revolving credit facility as of September 30, 2020.
  • 5The company completed the issuance of $1.5 billion in senior notes in July 2020, using proceeds to repurchase existing debt and extend maturities.
  • 6Underground mining operations at the Grasberg minerals district in Indonesia continue to advance on schedule, with improved production rates due to higher ore grades.
  • 7FCX has suspended its quarterly common stock dividend and does not expect to declare dividends during 2020, subject to ongoing assessment by the Board.

Frequently Asked Questions

Freeport-McMoRan Inc. reported a significant improvement in its third quarter 2020 results. Revenues increased to $3.9 billion from $3.2 billion in the prior year period, and the company achieved a net income of $329 million, a substantial turnaround from a net loss of $207 million in the third quarter of 2019. This improvement was primarily due to higher copper and gold prices, increased copper sales volumes, and lower production and delivery costs.

As of September 30, 2020, FCX had $2.4 billion in cash and cash equivalents and $3.5 billion in availability under its revolving credit facility, indicating a strong liquidity position. The company also actively managed its debt by issuing $1.5 billion in senior notes in July 2020 and using a significant portion of the proceeds to repurchase outstanding senior notes, thereby extending maturities and enhancing financial flexibility.

The ramp-up of underground mining at the Grasberg minerals district in Indonesia is progressing on schedule. During the third quarter, production increased due to higher ore grades, and the company achieved its metal volume targets. FCX expects production at PT-FI to significantly increase in 2021, nearly doubling projected 2020 levels.

Freeport-McMoRan Inc. suspended its quarterly common stock dividend in March 2020 and does not expect to declare any dividends during 2020. The company's ability to pay future dividends is subject to the Board's discretion and will depend on financial performance, cash requirements, future prospects, and global economic conditions. Additionally, current restrictions under the revolving credit facility prevent dividend payments until at least December 31, 2021.