Grupo México (GMEXICOB) Q4 2023 earnings summary

Executive summary

• FY2023 sales were $14,385M, up 3.7% YoY, while EBITDA declined 1.4% to $7,041M; transportation and infrastructure growth partly offset weaker mining results.

• Copper production rose 2.3% to 1,029,853 tons; Pilares reached full capacity, and 2024 plans target further copper and zinc production growth.

Financial highlights

• FY2023 revenue was $14,385M, operating income $5,461M and EBITDA $7,041M, up 3.7%, down 3.4% and down 1.4% YoY, respectively.

• Q4 2023 revenue was $3,422M, operating income $1,126M and EBITDA $1,526M, down 9.6%, 30.6% and 27.0% YoY, respectively.

• FY2023 net income was $2,917M versus $2,856M in 2022; Q4 net income was $619M, down 29.0% YoY.

• FY2023 EBITDA margin was 48.9%, versus 51.5% in 2022; Q4 margin was 44.6%, versus 55.2% in Q4 2022.

• FY2023 capex was $1,633M versus $1,542M in 2022; Q4 capex was $474M, down 7.2% YoY.

Outlook and guidance

• 2024 production guidance includes over 54,000 tons of zinc and 11,000 tons of copper from Buenavista Zinc; combined 2023–24 growth is projected above 51,600 tons of copper and 59,000 tons of zinc.

• Buenavista Zinc commissioning reached 99%; ramp-up began in 1Q24 after concentrator adjustments, with full ramp-up expected to double zinc capacity.

• A decade-long capital program exceeds $15B and includes Buenavista Zinc, El Pilar, El Arco, Tía María, Los Chancas and Michiquillay.

• Tía María is planned for annual production of 120,000 tons of copper cathode; construction is expected to generate 9,000 jobs, with local hiring prioritized.

• 2024 transportation capex was budgeted at $490.5M: $303.2M for growth, $92.0M for maintenance, $51.0M for efficiency and $44.3M for special projects.