10-QPeriod: Q3 FY2024

FREEPORT-MCMORAN INC Quarterly Report for Q3 Ended Sep 30, 2024

Filed November 8, 2024For Securities:FCX

Summary

Freeport-McMoRan Inc. (FCX) reported a solid third quarter and a strong first nine months of 2024, demonstrating robust revenue growth and improved profitability, primarily driven by higher average realized prices for copper and gold. The company's revenues for the third quarter increased to $6.8 billion from $5.8 billion in the prior year, with net income attributable to common stockholders rising to $526 million ($0.36 per diluted share) from $454 million ($0.31 per diluted share). For the nine-month period ended September 30, 2024, revenues reached $19.7 billion, a significant increase from $17.0 billion in the same period of 2023. Net income attributable to common stockholders for the nine months was $1.6 billion ($1.11 per diluted share), up from $1.5 billion ($1.01 per diluted share) in the prior year. These improvements are attributed to favorable commodity prices, higher gold sales volumes, and reduced environmental costs, partially offset by increased operating expenses and taxes. Management remains focused on operational execution, cost control, and advancing organic growth initiatives, with positive long-term fundamentals for copper. A notable event during the quarter was a fire at PT-FI's new smelter in Indonesia, which has temporarily suspended start-up operations. While repair costs are estimated at $100 million, expected to be covered by insurance, the recommencement of operations is anticipated by mid-2025. Despite this setback, mining operations and other projects remain unaffected. The company also increased its ownership in Cerro Verde to 55.08% and continues to maintain a strong balance sheet and liquidity position.

Financial Highlights

50 data points
Beta

Revenue

$6.68B

30.0% Gross Margin

Net Income

$526.00M

7.9% Net Margin

EPS (Diluted)

$0.36

Total Assets

$55.40B

Cash & Equivalents

$5.00B

Free Cash Flow

$1.87B

Financial Statements
Beta
Revenue$6.68B
Cost of Revenue$4.68B
Gross Profit$2.00B
SG&A Expenses$117.00M
Operating Expenses$4.85B
Operating Income$1.94B
Net Income$526.00M
EPS (Basic)$0.36
EPS (Diluted)$0.36
Shares Outstanding (Basic)1.44B
Shares Outstanding (Diluted)1.44B

Key Highlights

  • 1Strong Revenue Growth: Consolidated revenues increased by 16.6% to $6.8 billion in Q3 2024 and by 16.2% to $19.7 billion for the first nine months of 2024, driven by higher commodity prices and sales volumes.
  • 2Improved Profitability: Net income attributable to common stockholders rose to $526 million in Q3 2024 and $1.6 billion for the nine months, reflecting increased earnings per share.
  • 3Higher Commodity Prices: Average realized prices for copper were up 13% in Q3 and 10% year-to-date, while gold prices saw a significant increase of 35% in Q3 and 22% year-to-date.
  • 4PT-FI Smelter Fire: A fire at PT-FI's new smelter in Indonesia has temporarily halted start-up operations, with repairs estimated at $100 million and a projected restart by mid-2025. Mining operations remain unaffected.
  • 5Increased Cerro Verde Ownership: FCX increased its ownership stake in Cerro Verde to 55.08% through a $210 million share purchase.
  • 6Solid Cash Flow Generation: Operating cash flows were robust, reaching $5.7 billion for the first nine months of 2024, supporting capital expenditures and financial flexibility.
  • 7Consistent Shareholder Returns: The company declared a quarterly dividend of $0.15 per share and continued its share repurchase program, demonstrating commitment to returning capital to shareholders.

Frequently Asked Questions

The fire at PT-FI's new smelter in Indonesia has temporarily suspended start-up operations and is estimated to cost $100 million for repairs, expected to be covered by insurance. While operations are anticipated to recommence by mid-2025, the smelter start-up is delayed. Importantly, mining operations in Central Papua and the completion of the PMR project are not impacted. Financial results for the period reflect the ongoing development and commissioning, with future impacts to be managed through insurance and operational adjustments.

Higher commodity prices, particularly for copper and gold, have been a significant driver of Freeport-McMoRan's improved financial performance. Increased average realized prices for copper (up 13% in Q3 and 10% year-to-date) and gold (up 35% in Q3 and 22% year-to-date) directly contributed to higher revenues and operating income. This trend has bolstered profitability and operating cash flows for the reported periods.

Freeport-McMoRan views the long-term outlook for copper as favorable, citing limited supplies, growing demand driven by the global transition to renewable energy, electric vehicles, and urbanization, and its critical role in the global economy. For gold, prices have remained strong due to economic uncertainty and geopolitical tensions, supported by central bank demand. Management believes these fundamental factors justify a positive outlook for both key commodities.

Freeport-McMoRan maintains a strong balance sheet and liquidity position. As of September 30, 2024, consolidated debt was $9.7 billion, with $5.0 billion in cash and cash equivalents. The company has significant availability under its revolving credit facilities. Management is focused on prudently managing costs and capital expenditures while adhering to its financial policy, which includes a net debt target and a framework for shareholder returns, debt reduction, and investments in growth projects.