Freeport-McMoRan (FCX) Q4 2023 earnings summary

Executive summary

• 2023 copper production rose 6% YoY to 4.2bn lb and gold production rose 10% to 2.0mm oz; Grasberg delivered record output and $0.10/lb annual unit net cash costs.

• Adjusted EBITDA was $8.8bn, operating cash flow was $5.3bn and year-end net debt excluding smelter projects was $0.8bn.

Financial highlights

• Q4 revenue was $5.905bn, operating income $1.722bn, net income attributable to common stock $388mm and diluted EPS $0.27; adjusted net income was $393mm, or $0.27/share.

• FY23 revenue was $22.855bn, operating income $6.225bn, net income $1.848bn and diluted EPS $1.28; adjusted net income was $2.221bn, or $1.54/share.

• FY23 Adjusted EBITDA was $8.795bn vs. $9.522bn in 2022; operating cash flow was $5.3bn, net of $0.9bn in working capital and other uses.

• FY23 sales were 4.086bn lb copper at $3.85/lb, 1.713mm oz gold at $1,972/oz and 81mm lb molybdenum at $24.64/lb.

• FY23 capital expenditures totaled $4.8bn, including $1.7bn for Indonesia smelter projects; excluding smelters, capex was $3.1bn.

Outlook and guidance

• 2024 sales guidance: 4.1bn lb copper, 2.0mm oz gold and 85mm lb molybdenum; Q1 forecasts are 1.0bn lb copper, 575K oz gold and 20mm lb molybdenum.

• 2024 average copper unit net cash costs are forecast at $1.60/lb, including $1.55/lb in Q1; assumptions include gold at $2,000/oz and molybdenum at $19/lb.

• 2024 operating cash flow is estimated at $5.8bn at copper of $3.75/lb, gold of $2,000/oz and molybdenum of $19/lb; each $0.10/lb copper price change has a stated $400mm impact.

• 2024 capex is forecast at $4.6bn, including $2.3bn for major mining projects and $1.0bn for Indonesia smelter projects; excluding smelters, capex is $3.6bn.

• 2024 consolidated effective tax rate is estimated at 40%; U.S. rate estimate is 0%, excluding potential Inflation Reduction Act effects.