Summary
Southern Copper Corporation (SCCO) is a leading global copper producer with substantial operations in Peru and Mexico, reporting its fiscal year 2018 results. The company highlights record net sales of $7.1 billion, driven by strong performance across its mining segments and aided by favorable metal prices for copper and molybdenum. SCCO emphasizes its commitment to growth through significant capital investments, totaling $1.12 billion in 2018, with plans for further expansion to increase copper production significantly by 2025. The company maintains a robust and extensive copper reserve base, considered among the largest globally. Despite operational successes and record sales, investors should note the company's sensitivity to volatile commodity prices and ongoing risks associated with foreign operations, labor relations, and environmental regulations. SCCO's financial health remains strong, supported by a prudent capital structure and substantial cash flow generation, allowing for significant dividend payouts and share repurchases, although the latter has been inactive since 2016.
Financial Highlights
48 data points| Revenue | $7.10B |
| Cost of Revenue | $3.41B |
| Gross Profit | $3.01B |
| SG&A Expenses | $102.60M |
| Operating Expenses | $4.22B |
| Operating Income | $2.88B |
| Net Income | $1.54B |
| EPS (Basic) | $2.00 |
| Shares Outstanding (Basic) | 773.00M |
Key Highlights
- 1Record Net Sales: Achieved $7.1 billion in net sales for 2018, the highest in the company's history.
- 2Significant Capital Investments: Invested $1.12 billion in capital projects in 2018, with a planned $1.75 billion for 2019, focusing on expanding production capacity and improving operations.
- 3World-Class Copper Reserves: Holds one of the largest copper reserve positions globally, estimated at 69.7 million tons of contained copper.
- 4Strong Production Growth Expected: Forecasts an 11.7% increase in copper production for 2019, reaching 986,700 tons, driven by new projects and operational improvements.
- 5By-Product Strength: Saw significant increases in molybdenum prices (+45.9%) and substantial growth in silver (+8.7%) and zinc (+3.1%) production, contributing positively to overall results.
- 6Low Operating Cash Costs: Maintained competitive operating cash costs per pound of copper, particularly when net of by-product revenues ($0.87/lb in 2018), reflecting efficient operations.
- 7Shareholder Returns: Returned significant capital to shareholders through dividends, with $1.40 per share paid in 2018, and continued share repurchase authorizations, though repurchases were paused in 2016.