Summary
Southern Copper Corporation (SCCO) reported a strong first quarter for 2011, driven by significantly higher copper prices and increased sales volume, particularly from its Mexican open-pit operations which saw production ramp up. Net sales surged by 31.4% year-over-year to $1.6 billion, and net income attributable to SCC rose 24.8% to $478.4 million. This robust performance reflects the favorable commodity price environment for copper and other metals, alongside internal operational improvements. Despite the positive financial results, the company faces ongoing challenges. The controversial Tia Maria project in Peru remains suspended due to government and community concerns, impacting future growth potential. Furthermore, the company is managing several legal and labor matters, including ongoing class-action lawsuits and labor disputes in its Mexican operations, which could pose future risks. However, SCCO's strong operating cash flow and low production costs position it well to navigate these challenges and capitalize on the current favorable commodity cycle.
Financial Highlights
50 data points| Revenue | $1.60B |
| Cost of Revenue | $736.86M |
| Gross Profit | $794.50M |
| SG&A Expenses | $24.57M |
| Operating Expenses | $839.29M |
| Operating Income | $762.70M |
| Net Income | $478.40M |
| EPS (Basic) | $0.56 |
| EPS (Diluted) | $0.56 |
| Shares Outstanding (Basic) | 859.00M |
| Shares Outstanding (Diluted) | 859.00M |
Key Highlights
- 1Net sales increased by 31.4% to $1.602 billion compared to $1.219 billion in Q1 2010, driven by higher copper prices and increased sales volume.
- 2Net income attributable to SCC grew by 24.8% to $478.4 million ($0.56 per share) from $383.2 million ($0.45 per share) in Q1 2010.
- 3Operating income significantly improved to $762.7 million, up from $608.8 million in the prior year's quarter.
- 4Mined copper production increased by 13.7% year-over-year to 273.8 million pounds.
- 5The Tia Maria project's environmental impact assessment approval process remains suspended by the Peruvian government, posing a significant uncertainty for future development.
- 6The company is actively managing several legal proceedings, including class-action lawsuits related to past transactions and a labor dispute at the San Luis Potosi smelter site.
- 7Operating cash cost per pound of copper produced was $0.243, a notable increase from the credit of $(0.147) in Q1 2010, primarily due to lower by-product credits.