10-KPeriod: FY2020

SOUTHERN COPPER CORP/ Annual Report, Year Ended Dec 31, 2020

Filed February 26, 2021For Securities:SCCO

Summary

Southern Copper Corporation (SCCO) reported strong financial performance in its 2020 10-K filing, highlighting record net sales of $7.98 billion, an increase of 9.6% year-over-year. This growth was driven by higher sales volumes of copper, silver, and molybdenum, coupled with improved copper and silver prices, despite a decrease in molybdenum and zinc prices. The company's operating income saw a significant increase of 13.4% to $3.12 billion, reflecting effective cost management and improved production efficiencies. SCCO maintains a robust balance sheet with substantial cash reserves and a well-managed debt-to-equity ratio. The company's operational focus remains on cost control and production enhancement, as it navigates the dynamic commodity market. With a strong reserve position and strategic capital investment programs for future growth, SCCO appears well-positioned to capitalize on the anticipated positive outlook for the copper market in 2021 and beyond.

Financial Highlights

51 data points
Beta

Revenue

$7.98B

50.8% Gross Margin

Net Income

$1.57B

19.7% Net Margin

EPS (Diluted)

$2.03

Total Assets

$16.95B

Cash & Equivalents

$2.18B

Free Cash Flow

$2.19B

Financial Statements
Beta
Revenue$7.98B
Cost of Revenue$3.93B
Gross Profit$4.06B
SG&A Expenses$126.20M
Operating Expenses$4.86B
Operating Income$3.12B
Net Income$1.57B
EPS (Basic)$2.03
EPS (Diluted)$2.03
Shares Outstanding (Basic)773.10M
Shares Outstanding (Diluted)773.10M

Key Highlights

  • 1Record net sales of $7.98 billion in 2020, up 9.6% from $7.29 billion in 2019.
  • 2Operating income increased by 13.4% to $3.12 billion in 2020, up from $2.75 billion in 2019.
  • 3Net income attributable to SCCO was $1.57 billion in 2020, a 5.7% increase from $1.49 billion in 2019.
  • 4Copper production increased by 0.8% year-over-year to 2,207.6 million pounds in 2020.
  • 5Operating cash cost per pound of copper, net of by-product revenues, decreased by 21.7% to $0.69 in 2020.
  • 6The company ended 2020 with $2.18 billion in cash and cash equivalents, and total assets of $16.95 billion.
  • 7Capital investments totaled $592.2 million in 2020, with planned investments of $1.43 billion for 2021.

Frequently Asked Questions

In 2020, Southern Copper achieved record net sales of $7.98 billion, a 9.6% increase from 2019. Operating income rose by 13.4% to $3.12 billion, and net income attributable to SCCO increased by 5.7% to $1.57 billion. The company also saw a reduction in its operating cash cost per pound of copper, net of by-product revenues, by 21.7%.

Southern Copper implemented effective cost control measures, leading to a significant decrease in operating cash cost per pound of copper, net of by-product revenues, to $0.69 in 2020. This reduction was attributed to a temporary decrease in production costs, as some operating, stripping, and maintenance costs were reduced or postponed due to the COVID-19 pandemic.

Southern Copper has a positive outlook for 2021 and the long term, driven by anticipated global economic recovery, particularly in China and the automotive sector, which are expected to boost copper demand. Additionally, low global copper inventories and expected production increases from the company's growth projects position it favorably.

In 2020, Southern Copper invested $592.2 million in capital projects, primarily in its Mexican and Peruvian operations. For 2021, the company has approved a capital investment program of $1.43 billion, focusing on key projects like Buenavista Zinc, Pilares, and El Pilar in Mexico, and the Tia Maria and Quebrada Honda dam expansion projects in Peru.