10-QPeriod: Q2 FY2023

FREEPORT-MCMORAN INC Quarterly Report for Q2 Ended Jun 30, 2023

Filed August 3, 2023For Securities:FCX

Summary

Freeport-McMoRan Inc. (FCX) reported its financial results for the second quarter and first six months ended June 30, 2023. Net income attributable to common stockholders was $343 million ($0.23 per diluted share) for the quarter and $1.0 billion ($0.69 per diluted share) for the six-month period. These figures represent a decrease compared to the same periods in 2022, primarily due to lower copper sales volumes resulting from shipping delays in Indonesia and lower copper prices, compounded by a reduced economic interest in PT Freeport Indonesia (PT-FI) and increased operating costs. Despite the year-over-year decline in profitability, the company highlighted solid operating performance and strategic execution. FCX continues to advance its value-enhancing initiatives, including leach innovation for incremental copper production and progress on underground development at Grasberg. The company maintains a strong balance sheet with consolidated debt of $9.5 billion and cash and cash equivalents of $6.7 billion as of June 30, 2023. Management remains optimistic about the long-term outlook for copper, driven by global energy transition and urbanization trends, and anticipates continued solid performance from its high-quality asset base.

Financial Highlights

50 data points
Beta

Revenue

$5.93B

30.9% Gross Margin

Net Income

$343.00M

5.8% Net Margin

EPS (Diluted)

$0.23

Total Assets

$50.91B

Cash & Equivalents

$6.68B

Free Cash Flow

$1.67B

Financial Statements
Beta
Revenue$5.93B
Cost of Revenue$4.10B
Gross Profit$1.83B
SG&A Expenses$115.00M
Operating Expenses$4.33B
Operating Income$1.41B
Net Income$343.00M
EPS (Basic)$0.24
EPS (Diluted)$0.23
Shares Outstanding (Basic)1.43B
Shares Outstanding (Diluted)1.44B

Key Highlights

  • 1Net income attributable to common stockholders decreased to $343 million in Q2 2023 from $840 million in Q2 2022, and $1.0 billion for the first six months of 2023 from $2.4 billion in the prior year's period.
  • 2Consolidated revenues for the second quarter were $5.7 billion, a slight increase from $5.4 billion in the prior year, but down to $11.1 billion for the six-month period compared to $12.0 billion in the prior year.
  • 3Copper sales volumes decreased primarily due to shipping delays in Indonesia related to export license renewal and lower ore grades in North America.
  • 4The company's economic interest in PT Freeport Indonesia (PT-FI) decreased to 48.76% effective January 1, 2023, impacting reported results.
  • 5Consolidated debt stood at $9.5 billion and cash and cash equivalents were $6.7 billion as of June 30, 2023, resulting in net debt of $2.8 billion.
  • 6FCX is advancing leach innovation initiatives targeting approximately 200 million pounds of copper per year by the end of 2023.
  • 7The company is progressing the construction of the Manyar smelter in Indonesia, with completion expected in mid-2024.

Frequently Asked Questions

The decrease in net income was primarily driven by lower copper sales volumes due to shipping delays in Indonesia associated with PT-FI's export license renewal, alongside lower average realized copper prices. Additionally, a reduced economic interest in PT-FI effective January 1, 2023, and increased costs for maintenance and supplies also contributed to the decline.

As of June 30, 2023, Freeport-McMoRan reported consolidated debt of $9.5 billion and consolidated cash and cash equivalents of $6.7 billion, resulting in a net debt of $2.8 billion. The company also has significant availability under its revolving credit facilities.

The company is focused on advancing its leach innovation initiatives to extract incremental copper from existing stockpiles, targeting a run rate of approximately 200 million pounds of copper per year by the end of 2023. In Indonesia, the construction of the Manyar smelter is progressing, with completion expected in mid-2024. Furthermore, ongoing underground development at the Grasberg minerals district continues to support long-term operations.

Freeport-McMoRan believes the long-term fundamentals for copper are favorable, driven by its essential role in the global transition to renewable energy, electric vehicles, and continued urbanization. Supply challenges are expected due to long lead times for new mine development and declining ore grades at existing operations.