Summary
Southern Copper Corporation (SCCO) reported its second-quarter and first-half 2020 financial results, demonstrating resilience amidst the global COVID-19 pandemic. While net sales saw a slight decrease of 1.8% for the first six months compared to the prior year, primarily due to lower copper and molybdenum prices, the company achieved higher sales volumes for copper, molybdenum, and silver. Net income attributable to SCC decreased by 40.0% for the first six months, impacted by both lower sales and a 10.7% increase in operating costs and expenses. The company maintained strong liquidity, with cash and cash equivalents of $1.8 billion at the end of June 2020, and managed its capital expenditures effectively, reducing spending by 39.4% in the first half of the year. The company continued its focus on operational efficiency and cost control. Operating cash costs per pound of copper, net of by-product revenues, decreased by 15.9% in the second quarter and 14.6% for the first half of 2020 compared to the prior year, showcasing effective cost management. SCCO also provided an updated outlook, anticipating lower metal prices for copper, molybdenum, and zinc, but an increase in silver prices. Despite the ongoing uncertainties related to COVID-19, SCCO's robust production levels and strategic capital allocation position it to navigate the challenging economic environment.
Financial Highlights
47 data points| Revenue | $1.79B |
| Cost of Revenue | $976.70M |
| Gross Profit | $808.70M |
| SG&A Expenses | $31.40M |
| Operating Expenses | $1.21B |
| Operating Income | $577.20M |
| Net Income | $259.50M |
| EPS (Basic) | $0.34 |
| Shares Outstanding (Basic) | 773.10M |
Key Highlights
- 1Net sales for the six months ended June 30, 2020, were $3,505.1 million, a slight decrease of 1.9% from $3,571.4 million in the same period of 2019, primarily driven by lower copper and molybdenum prices, partially offset by increased sales volumes of copper, molybdenum, and silver.
- 2Net income attributable to SCC for the six months ended June 30, 2020, was $474.3 million, a decrease of 40.0% from $790.6 million in the same period of 2019. This decline was mainly due to lower sales and a 10.7% increase in operating costs and expenses.
- 3Operating cash costs per pound of copper, net of by-product revenues, decreased significantly by 15.9% in Q2 2020 and 14.6% for the first six months of 2020 compared to the prior year, indicating strong cost management.
- 4The company maintained a strong liquidity position with $1,808.8 million in cash and cash equivalents as of June 30, 2020. Capital expenditures were reduced by 39.4% to $214.3 million in the first six months of 2020 compared to $353.5 million in the prior year.
- 5Production of copper increased by 2.1% for the first six months of 2020 compared to the same period in 2019, driven by higher production in Peruvian and Mexican operations, particularly at the Cuajone and Toquepala mines.
- 6Molybdenum production increased by 26.4% and silver production by 17.3% for the first six months of 2020 compared to the prior year, largely due to contributions from new facilities and improved operations at specific mines.
- 7The company's outlook for the remainder of 2020 anticipates lower copper, molybdenum, and zinc prices, but higher silver prices, reflecting market dynamics influenced by global economic conditions and the COVID-19 pandemic.