What were the primary drivers behind the decrease in net income and sales for the nine months ended September 30, 2013?

The decrease in net income and sales was primarily driven by lower average metal prices, particularly for copper, which saw a 7.2% decline in the nine-month period. Additionally, sales volumes decreased in several key segments, contributing to the overall revenue reduction.

How is Southern Copper investing for future growth, and what are the key projects?

Southern Copper is heavily investing in capital expenditures, which increased by 78.8% year-over-year for the nine-month period. The primary focus is on growth projects, notably the Buenavista expansion in Mexico, which aims to significantly increase copper production capacity. Other key projects include developments at Toquepala and Cuajone mines in Peru.

What are the significant risks or concerns highlighted in the report for investors?

Key concerns include the inherent volatility of commodity prices, potential adverse impacts from proposed tax law changes in Mexico that could affect the mining sector's competitiveness, and evolving environmental regulations, particularly new air quality standards in Peru that could affect smelter operations. Additionally, the company's operating cash costs per pound of copper increased due to inflation and production declines.

What is the company's dividend policy, and have there been any changes?

Southern Copper declared a quarterly dividend of $0.12 per share for the period. This represents a decrease from the $0.24 per share paid in the comparable quarter of the prior year. The company has also authorized an increase in its share repurchase program from $1 billion to $2 billion.

SCCO 10-Q Quarterly Report Q3 FY2013 — Revenue, Net Income, EPS

Summary

Southern Copper Corporation (SCCO) reported its third-quarter and nine-month results for the period ending September 30, 2013. For the nine months, net income attributable to SCCO was $1.21 billion, a decrease of 13.6% compared to the same period in 2012, primarily due to lower metal prices. Net sales also declined by 12.0% year-over-year, largely driven by a decrease in the average LME copper price and reduced sales volumes in key segments. The company experienced a significant increase in capital expenditures, up 78.8% for the nine-month period, reflecting ongoing investments in growth projects, particularly at the Buenavista mine in Mexico, aimed at increasing copper production capacity. Despite lower profitability, SCCO maintained its focus on operational efficiency and strategic expansion, with a declared quarterly dividend of $0.12 per share. Key concerns for investors include the volatility of commodity prices, potential changes in Mexican tax laws that could impact the mining industry, and environmental regulations in Peru. The company is actively managing these factors while executing its long-term growth strategy.

Financial Highlights

48 data points

Beta

Revenue

$1.38B

0.4% Gross Margin

Net Income

$344.20M

0.2% Net Margin

EPS (Diluted)

$0.41

Total Assets

$10.94B

Cash & Equivalents

$1.80B

Free Cash Flow

-$23.07M

Financial Statements

Beta

Revenue	$1.38B
Cost of Revenue	$663.34M
Gross Profit	$617.00M
SG&A Expenses	$24.11M
Operating Expenses	$800.92M
Operating Income	$580.90M
Net Income	$344.20M
EPS (Basic)	$0.41
Shares Outstanding (Basic)	841.95M

Key Highlights

1Net income attributable to SCCO for the nine months ended September 30, 2013, was $1.21 billion, a decrease of 13.6% compared to the prior year, mainly due to lower metal prices.
2Net sales for the nine months decreased by 12.0% to $4.42 billion, primarily driven by lower average copper prices ($3.35/lb vs $3.61/lb) and reduced sales volumes.
3Capital expenditures surged by 78.8% to $1.19 billion for the nine months, signaling significant investment in growth projects, especially the Buenavista expansion in Mexico.
4Operating cash cost per pound of copper increased by 12.8% to $1.92 for the nine months, influenced by cost inflation (labor, fuel, power) and decreased production.
5The company declared a quarterly dividend of $0.12 per share, down from $0.24 per share in the prior year's comparable quarter.
6SCCO is closely monitoring proposed tax law changes in Mexico that could negatively impact the mining industry's competitiveness.
7The company's Peruvian operations face ongoing scrutiny regarding new air quality standards for sulfur dioxide emissions, effective in 2014.

SOUTHERN COPPER CORP/ Quarterly Report for Q3 Ended Sep 30, 2013

Summary

Financial Highlights

Key Highlights

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