Summary
Southern Copper Corporation (SCCO) reported a decrease in net sales and net income for the first quarter of 2016 compared to the same period in 2015. Net sales declined by 2.3% to $1,245.1 million, primarily due to lower average metal prices for copper, molybdenum, silver, and zinc. Net income attributable to SCC fell by 34.5% to $185.1 million, or $0.24 per diluted share, down from $282.4 million, or $0.35 per diluted share, in Q1 2015. Despite lower revenues, the company saw a significant increase in copper sales volume (26.2%) driven by higher production from the Buenavista expansion. The company's operating cash cost per pound of copper, when including by-product revenues, remained stable at $0.98. However, the cash cost without by-product revenues increased due to higher cost of sales, partially offset by operational efficiencies and increased production from lower-cost sources like the Buenavista projects. Significant capital investments continued, with $223.3 million allocated to capital projects aimed at increasing production capacity and improving operational performance. Management expressed an optimistic outlook for long-term copper prices due to anticipated market tightness and production cuts globally.
Financial Highlights
46 data points| Cost of Revenue | $726.80M |
| Gross Profit | $382.90M |
| SG&A Expenses | $26.30M |
| Operating Expenses | $898.90M |
| Operating Income | $346.20M |
| Net Income | $185.10M |
| EPS (Basic) | $0.23 |
| Shares Outstanding (Basic) | 773.90M |
Key Highlights
- 1Net sales decreased by 2.3% to $1,245.1 million in Q1 2016 compared to Q1 2015, primarily due to lower metal prices.
- 2Net income attributable to SCC decreased by 34.5% to $185.1 million ($0.24/share) in Q1 2016, down from $282.4 million ($0.35/share) in Q1 2015.
- 3Copper sales volume increased by 26.2% to 469.3 million pounds, driven by higher production from the Buenavista expansion and improved operational practices.
- 4Operating cash cost per pound of copper, with by-product revenues, remained stable at $0.98, while without by-product revenues, it increased to $1.41 from $1.66, reflecting improved operational efficiency.
- 5Capital expenditures were $223.3 million in Q1 2016, a slight decrease from $248.7 million in Q1 2015, supporting ongoing development projects to increase production capacity.
- 6The company has a positive long-term outlook for copper prices, anticipating market tightness due to global production cuts and steady demand.
- 7Dividends paid per share decreased to $0.03 in Q1 2016 from $0.10 in Q1 2015.