10-QPeriod: Q1 FY2021

FREEPORT-MCMORAN INC Quarterly Report for Q1 Ended Mar 31, 2021

Filed May 5, 2021For Securities:FCX

Summary

Freeport-McMoRan Inc. (FCX) reported a significant turnaround in the first quarter of 2021, driven by a substantial increase in commodity prices, particularly copper. Revenues surged to $4.85 billion, a dramatic improvement from $2.80 billion in the prior year's quarter, leading to a net income attributable to common stockholders of $718 million, a stark contrast to the $491 million loss in Q1 2020. This performance reflects the company's successful operational execution and the favorable market environment for its key commodities. The company's operational highlights include strong performance from its North and South America mining segments, alongside significant progress in ramping up underground operations at PT Freeport Indonesia (PT-FI). FCX ended the quarter with a solid liquidity position, including $4.6 billion in cash and cash equivalents and substantial availability under its revolving credit facility, positioning it well for upcoming debt maturities and planned capital expenditures.

Financial Highlights

50 data points
Beta

Revenue

$4.85B

33.9% Gross Margin

Net Income

$718.00M

14.8% Net Margin

EPS (Diluted)

$0.48

Total Assets

$43.64B

Cash & Equivalents

$4.58B

Free Cash Flow

$1.07B

Financial Statements
Beta
Revenue$4.85B
Cost of Revenue$3.21B
Gross Profit$1.64B
SG&A Expenses$100.00M
Operating Expenses$3.32B
Operating Income$1.53B
Net Income$718.00M
EPS (Basic)$0.49
EPS (Diluted)$0.48
Shares Outstanding (Basic)1.46B
Shares Outstanding (Diluted)1.48B

Key Highlights

  • 1Revenues significantly increased to $4.85 billion in Q1 2021, up from $2.80 billion in Q1 2020, driven by higher commodity prices.
  • 2Net income attributable to common stockholders was $718 million in Q1 2021, a substantial recovery from a net loss of $491 million in Q1 2020.
  • 3Consolidated operating cash flows improved to $1.075 billion in Q1 2021, compared to a negative $38 million in Q1 2020.
  • 4The company ended the quarter with $4.58 billion in cash and cash equivalents and $9.81 billion in total debt.
  • 5FCX announced the reinstatement of a quarterly cash dividend of $0.075 per share, with the first payment expected in May 2021.
  • 6PT Freeport Indonesia's (PT-FI) underground ramp-up is advancing on schedule, contributing to increased production volumes.
  • 7Capital expenditures for 2021 are projected at $2.3 billion, with a significant portion allocated to major projects, primarily underground development in Grasberg.

Frequently Asked Questions

The primary drivers were significantly higher average realized prices for copper (up 62%) and gold (up 7%), alongside increased sales volumes for copper and gold, particularly from the ramp-up of underground mining at PT Freeport Indonesia. These factors more than offset increased costs and taxes.

FCX ended Q1 2021 with $4.58 billion in cash and cash equivalents and $9.81 billion in total debt. It has approximately $3.5 billion available under its revolving credit facility. The company is focused on managing debt maturities, with no significant senior note maturities until March 2023, and has a financial policy aimed at achieving a net debt target of $3 billion to $4 billion by the end of 2021.

FCX projects consolidated sales volumes of 3.85 billion pounds of copper and 1.3 million ounces of gold for 2021. The company maintains a positive long-term outlook for copper, citing supply limitations and demand from the clean energy transition. However, commodity prices are subject to historical fluctuations and external market factors.

The ramp-up of underground mining at PT-FI is progressing on schedule and is expected to significantly boost copper and gold production. FCX is also navigating discussions with the Indonesian government regarding administrative fines for delays in the greenfield smelter project and exploring expansion options for the existing PT Smelting facility.