10-QPeriod: Q1 FY2025

SOUTHERN COPPER CORP/ Quarterly Report for Q1 Ended Mar 31, 2025

Filed April 30, 2025For Securities:SCCO

Summary

Southern Copper Corporation (SCCO) reported robust financial results for the first quarter of 2025, with net sales increasing by 20.1% year-over-year to $3,121.9 million. This growth was driven by higher sales volumes and increased prices for key commodities, particularly copper, molybdenum, silver, and zinc. Net income attributable to SCC saw a significant jump of 28.5% to $945.9 million, translating to earnings per share of $1.19, up from $0.95 in the prior year's quarter. The company's operational efficiency was highlighted by a substantial reduction in its net operating cash cost per pound of copper, reflecting effective cost management and strong by-product revenues. SCCO also demonstrated a strong commitment to shareholder returns, increasing its total dividend per share (cash and stock) by 75.0%. The company continues to advance its strategic capital investment projects in Mexico and Peru, underscoring its focus on future growth and operational optimization.

Financial Highlights

50 data points
Beta

Revenue

$3.12B

57.7% Gross Margin

Net Income

$945.90M

30.3% Net Margin

EPS (Diluted)

$1.15

Total Assets

$19.79B

Cash & Equivalents

$4.12B

Free Cash Flow

$403.60M

Financial Statements
Beta
Revenue$3.12B
Cost of Revenue$1.32B
Gross Profit$1.80B
SG&A Expenses$31.70M
Operating Expenses$1.59B
Operating Income$1.54B
Net Income$945.90M
EPS (Basic)$1.15
EPS (Diluted)$1.15
Shares Outstanding (Basic)821.60M
Shares Outstanding (Diluted)821.60M

Key Highlights

  • 1Net sales increased by 20.1% to $3,121.9 million, driven by higher volumes and prices across key commodities.
  • 2Net income attributable to SCC rose by 28.5% to $945.9 million, with EPS improving to $1.19 from $0.95.
  • 3Operating cash cost per pound of copper, net of by-product revenues, significantly decreased by 28.4% to $0.77, showcasing strong cost control and by-product value realization.
  • 4Total dividend per share (cash and stock) increased by 75.0% to $1.40.
  • 5Copper production remained stable year-over-year, while zinc production saw a substantial 49.3% increase.
  • 6Capital expenditures increased by 48.7% to $317.8 million, reflecting ongoing investment in growth projects such as Tia Maria and El Pilar.
  • 7The company maintains a positive outlook for copper prices, citing a projected market deficit and low global inventories.

Frequently Asked Questions

Southern Copper's net sales increased by 20.1% to $3,121.9 million due to a combination of factors. Higher sales volumes were observed for copper (+3.6%), molybdenum (+9.9%), silver (+14.1%), and zinc (+42.4%). Simultaneously, prices for these commodities also saw increases, with copper prices (LME) rising by 10.7%, molybdenum by 3.0%, silver by 38.4%, and zinc by 16.2%.

Southern Copper effectively managed its operating costs, leading to a notable decrease in its operating cash cost per pound of copper, net of by-product revenues, by 28.4% to $0.77. This improvement was driven by effective cost management and significantly higher by-product revenues, primarily from zinc, silver, and molybdenum, supported by increased prices and sales volumes. This cost efficiency, coupled with strong sales performance, contributed to a 28.5% increase in net income attributable to SCC, reaching $945.9 million.

Southern Copper continues to invest in its strategic growth projects. Capital expenditures for the first quarter of 2025 increased by 48.7% to $317.8 million. Key projects include the Tia Maria project in Peru, which is in the early construction phase with significant local employment generation, and the El Pilar project in Mexico, utilizing SX-EW technology. The company also has other potential projects in its pipeline, such as Los Chancas and Michiquillay in Peru, and El Arco in Mexico, which are in various stages of evaluation and development, reflecting a long-term commitment to expanding production and enhancing operational capabilities.

Southern Copper's profitability is significantly influenced by metal prices, and it acknowledges the volatility of copper and other commodity prices. The company's outlook for copper remains positive, citing a projected market deficit and low global inventories. Additionally, the company is monitoring geopolitical factors, including trade tensions and potential tariffs, which could impact global commodity prices and its business operations. The company states that it has risk management efforts and mitigation strategies in place to address these political, regulatory, and trade-related risks.