What was the impact of the Cuajone mine stoppage on SCCO's financial results?

The Cuajone mine stoppage, which occurred in February 2022 due to community protests, resulted in an estimated production loss of 12,869 tonnes of copper and 296 tonnes of molybdenum, translating to a $117 million reduction in sales and $7.9 million in unabsorbed fixed costs. However, the company stated that the impact on its net income and financial position was not material as of March 31, 2022, due to mitigation measures like acquiring concentrates from other sources. Operations resumed fully in April 2022.

How did metal prices affect SCCO's performance in Q1 2022?

Metal prices were a significant driver of SCCO's performance. The average LME copper price increased by 17.7% to $4.53 per pound, molybdenum prices rose by 69.7% to $18.99 per pound, and zinc prices increased by 36.0%. These higher prices, coupled with increased zinc sales volume, largely offset a decrease in copper sales volume and contributed to the 9.1% increase in net sales.

What are the key capital investment projects SCCO is undertaking?

SCCO continues to invest in growth projects. Major ongoing investments include the Buenavista Zinc project in Mexico, aimed at doubling zinc production capacity, and the Pilares open-pit mine in Mexico, expected to begin production in late 2022. In Peru, investments are being made in the Quebrada Honda dam expansion. The company also has several potential future projects under evaluation.

What is the outlook for copper and molybdenum prices?

SCCO's outlook for copper prices remains positive, with market intelligence houses expecting a deficit in 2022. Factors supporting this include expected demand growth, uncertainty in production from Chile and Peru, and the exclusion of Russian supply. For molybdenum, prices are expected to be supported by lower exports from China, extended delivery times, and port congestion.

SCCO 10-Q Quarterly Report Q1 FY2022 — Revenue, Net Income, EPS

Summary

Southern Copper Corporation (SCCO) reported its first quarter 2022 results, demonstrating resilience despite operational challenges. Net sales increased by 9.1% to $2.76 billion, primarily driven by higher copper, molybdenum, and zinc prices, although copper sales volume declined. Net income attributable to SCCO rose slightly by 2.7% to $784.7 million. The company successfully navigated the temporary stoppage at its Cuajone mine in Peru due to community protests, which caused a production loss but did not materially impact financial results due to mitigation efforts. Significant capital investments continue, supporting future growth and operational enhancements. The outlook remains cautiously optimistic, supported by strong metal prices and the resolution of the Cuajone mine stoppage in April 2022, allowing operations to resume at full capacity.

Financial Highlights

49 data points

Beta

Revenue

$2.76B

0.6% Gross Margin

Net Income

$784.70M

0.3% Net Margin

EPS (Diluted)

$1.02

Total Assets

$17.90B

Cash & Equivalents

$2.85B

Free Cash Flow

$615.50M

Financial Statements

Beta

Revenue	$2.76B
Cost of Revenue	$1.06B
Gross Profit	$1.71B
SG&A Expenses	$30.30M
Operating Expenses	$1.29B
Operating Income	$1.47B
Net Income	$784.70M
EPS (Basic)	$1.02
EPS (Diluted)	$1.02
Shares Outstanding (Basic)	773.10M
Shares Outstanding (Diluted)	773.10M

Key Highlights

1Net sales increased by 9.1% to $2.76 billion, driven by higher metal prices, particularly copper, molybdenum, and zinc.
2Net income attributable to SCCO increased by 2.7% to $784.7 million ($1.02 per share).
3The Cuajone mine in Peru experienced a temporary operational stoppage due to community protests, resulting in an estimated production loss of 12,869 tonnes of copper and 296 tonnes of molybdenum for the quarter, but operations resumed in April 2022.
4Capital expenditures totaled $205.2 million, primarily directed towards projects in Mexico (Buenavista Zinc, Pilares) and Peru (Quebrada Honda dam expansion).
5Operating cash costs per pound of copper, net of by-product revenues, decreased by 25.7% to $0.55, largely due to increased by-product revenues.
6The company declared a dividend of $1.00 per share in March 2022 and authorized a $1.25 per share dividend for May 2022.
7Strong performance in molybdenum prices saw a 69.7% increase compared to the prior year period, contributing significantly to overall revenue.

SOUTHERN COPPER CORP/ Quarterly Report for Q1 Ended Mar 31, 2022

Summary

Financial Highlights

Key Highlights

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