Summary
Southern Copper Corporation (SCCO) reported its first quarter 2019 financial results, showing a year-over-year decrease in net sales and net income, primarily driven by lower commodity prices, particularly copper. Despite the price pressures, the company saw an increase in copper production volumes, benefiting from the initial ramping up of the new Toquepala concentrator and operational improvements at Buenavista. Cash flow from operations was significantly lower than the prior year, largely due to increased working capital requirements and lower net income. The company also highlighted ongoing capital investment programs aimed at increasing production capacity and efficiency, with significant expenditures in both its Peruvian and Mexican operations. SCCO continues to manage its business with a focus on cost control and production enhancement, aiming to remain profitable through price cycles.
Financial Highlights
47 data points| Revenue | $1.75B |
| Cost of Revenue | $844.10M |
| Gross Profit | $727.70M |
| SG&A Expenses | $28.50M |
| Operating Expenses | $1.06B |
| Operating Income | $693.70M |
| Net Income | $388.20M |
| EPS (Basic) | $0.50 |
| Shares Outstanding (Basic) | 773.00M |
Key Highlights
- 1Net sales decreased by 4.8% to $1.75 billion in Q1 2019 compared to Q1 2018, primarily due to a 10.8% decline in copper prices.
- 2Net income attributable to SCCO decreased by 17.5% to $388.2 million in Q1 2019, largely impacted by lower sales and prices.
- 3Copper production increased by 11.6% to 504.0 million pounds, driven by higher output at Toquepala (following the new concentrator ramp-up) and Buenavista.
- 4Operating cash cost per pound of copper, net of by-product revenues, increased by 13.9% to $0.90, mainly due to lower by-product credits.
- 5Capital investments in Q1 2019 were $173.1 million, a decrease of 41.5% from Q1 2018, reflecting ongoing strategic project development.
- 6The company declared a dividend of $0.40 per share, an increase from the $0.30 paid in the prior year's quarter.
- 7SCCO continues to manage its significant related-party transactions with Grupo Mexico and its affiliates, which are subject to Audit Committee review.