Summary
Southern Copper Corporation (SCCO) reported its Q2 2014 financial results, showing a year-over-year increase in net sales for the quarter, driven by higher sales volumes of copper and molybdenum, and improved pricing for molybdenum and zinc. However, for the six-month period, net sales declined due to lower copper and silver prices and reduced sales volumes of silver and zinc. Profitability saw a decrease, with net income attributable to SCC down for both the quarter and the year-to-date period compared to 2013. This was primarily influenced by lower average commodity prices for copper and silver. The company's operational performance was strong in terms of copper production, which increased significantly across most mines, including contributions from new facilities. Capital expenditures remained substantial as SCCO continued its expansion programs in Mexico and Peru, aiming to significantly boost copper production capacity.
Financial Highlights
48 data points| Revenue | $1.49B |
| Cost of Revenue | $726.59M |
| Gross Profit | $644.70M |
| SG&A Expenses | $25.40M |
| Operating Expenses | $890.14M |
| Operating Income | $597.30M |
| Net Income | $337.30M |
| EPS (Basic) | $0.40 |
| Shares Outstanding (Basic) | 833.35M |
Key Highlights
- 1Net sales increased by 5.5% to $1.487 billion in Q2 2014 compared to Q2 2013, driven by higher sales volumes of copper and molybdenum and improved prices for molybdenum and zinc.
- 2For the six months ended June 30, 2014, net sales decreased by 6.3% to $2.842 billion compared to the prior year, mainly due to lower copper and silver prices and reduced sales volumes of silver and zinc.
- 3Net income attributable to SCC declined to $337.3 million in Q2 2014 from $372.7 million in Q2 2013, and for the six-month period, it fell to $660.6 million from $868.1 million, impacted by lower commodity prices.
- 4Copper production increased by 12.1% in Q2 2014 year-over-year, benefiting from higher ore grades, improved recoveries, and contributions from new facilities like the Buenavista SX-EW III plant.
- 5Capital expenditures were $375.6 million for the quarter and $699.4 million for the six-month period, reflecting ongoing investments in expansion programs in Mexico and Peru.
- 6The company is facing increased tax burdens, particularly a new Mexican royalty tax that contributed 4.7% to the effective tax rate increase for the first six months of 2014.
- 7The Tia Maria project in Peru received environmental impact assessment approval in August 2014, paving the way for potential project development, which represents a significant investment and job creation opportunity.