Summary
Southern Copper Corporation (SCCO) in its 2017 10-K filing highlights its position as a leading global copper producer with significant operations in Peru and Mexico. The company reported strong revenue growth driven by higher metal prices, particularly for copper, and increased sales volumes for copper and zinc. Despite a significant one-time tax expense related to the U.S. Tax Cuts and Jobs Act of 2017, the company demonstrated operational resilience, with production levels remaining robust and cost management efforts showing positive results. SCCO also provided an optimistic outlook for 2018, anticipating further production increases and continued demand for its products, supported by global economic growth and expected market deficits in copper supply. The filing details substantial capital investment programs focused on expanding production capacity and improving operational efficiencies across its Peruvian and Mexican assets. The company maintains a significant and high-quality copper reserve base, further underpinning its long-term viability. While acknowledging various operational and market risks, including commodity price volatility and labor relations, SCCO's management expresses confidence in its ability to navigate these challenges and deliver value to shareholders through strategic investments and disciplined cost control.
Financial Highlights
48 data points| Revenue | $6.65B |
| Cost of Revenue | $3.25B |
| Gross Profit | $2.73B |
| SG&A Expenses | $93.10M |
| Operating Expenses | $4.04B |
| Operating Income | $2.62B |
| Net Income | $728.50M |
| EPS (Basic) | $0.94 |
| Shares Outstanding (Basic) | 773.00M |
Key Highlights
- 1Strong revenue growth in 2017, up 23.7% to $6.65 billion, primarily driven by higher copper prices (average LME/COMEX $2.80/lb) and slightly increased sales volumes.
- 2Net income attributable to SCCO was $728.5 million, a decrease from 2016, largely due to a provisional $785.9 million non-cash tax expense related to the U.S. Tax Cuts and Jobs Act.
- 3Production volumes remained significant, with 1.93 billion pounds of copper mined in 2017. Molybdenum, zinc, and silver production were also substantial.
- 4Operating cash cost per pound of copper, net of by-product revenues, decreased by 3.2% to $0.92 in 2017, reflecting effective cost management and strong by-product prices.
- 5The company reported substantial ore reserves, totaling 70.6 million tons of contained copper, based on SEC-compliant pricing of $2.50/lb for copper and $7.07/lb for molybdenum.
- 6Capital investments in 2017 totaled $1.02 billion, with significant planned investments of $1.75 billion for 2018, focusing on mine expansions and new projects.
- 7The company's controlling shareholder, Grupo Mexico, owned 88.9% of SCCO's capital stock as of December 31, 2017.