01—Abstract
Summary
Summary of the 10-K filed February 26, 2021. Cited figures are marked; the original filing is the authoritative source.
Southern Copper Corporation (SCCO) reported strong financial performance in its 2020 10-K filing, highlighting record net sales of $7.98 billiona, 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 billionb, 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.
02—Key points
Key Highlights
- Record net sales of $7.98 billion in 2020, up 9.6% from $7.29 billion in 2019.
- Operating income increased by 13.4% to $3.12 billion in 2020, up from $2.75 billion in 2019.
- Net income attributable to SCCO was $1.57 billion in 2020, a 5.7% increase from $1.49 billion in 2019.
- Copper production increased by 0.8% year-over-year to 2,207.6 million pounds in 2020.
- Operating cash cost per pound of copper, net of by-product revenues, decreased by 21.7% to $0.69 in 2020.
- The company ended 2020 with $2.18 billion in cash and cash equivalents, and total assets of $16.95 billion.
- Capital investments totaled $592.2 million in 2020, with planned investments of $1.43 billion for 2021.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2020, Southern Copper Corp kept $0.20.
- Revenue$7.98B100.0%
- Cost of revenue−$3.93B49.2%
- Gross profit$4.06B50.8%
- Operating costs−$934.4M11.7%
- Operating income$3.12B39.1%
- Interest, other & tax−$1.55B19.4%
- Net income$1.57B19.7%
Where FY2020 revenue went
$7.98B- Cost of revenue: $3.93B, 49% of revenue
- Net income: $1.57B, 20% of revenue
- Interest, other & tax: $1.55B, 19% of revenue
- SG&A: $126.2M, 1.6% of revenue
- Other operating costs: $808.2M, 10% of revenue
Kept 20% as net incomeSG&A $126.2M · 1.6%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2020filed February 26, 2021Financial Statements
FY2020 against FY2019
| Line item | FY2020FY2019 | Change |
|---|---|---|
| Revenue | $7.98B$7.29B | +9.6% |
| Cost of Revenue | $3.93B$3.61B | +9.0% |
| Gross Profit | $4.06B$2.91B | +39.1% |
| SG&A Expenses | $126.20M$131.80M | −4.2% |
| Operating Expenses | $4.86B$4.53B | +7.3% |
| Operating Income | $3.12B$2.75B | +13.4% |
| Net Income | $1.57B$1.49B | +5.7% |
| EPS (Basic) | $2.03$1.92 | +5.7% |
| EPS (Diluted) | $2.03$1.92 | +5.7% |
| Shares Outstanding (Basic) | 773.10M773.10M | 0.0% |
| Shares Outstanding (Diluted) | 773.10M773.10M | 0.0% |
05—Questions
Frequently Asked Questions
What were Southern Copper's main financial achievements in 2020?
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%.
How did the company manage its costs in 2020?
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.
What is the company's outlook for 2021 and beyond?
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.
What were the major capital investment activities in 2020 and planned for 2021?
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.
06—Continue