Southern Copper (SCCO) Q2 2024 earnings summary

Executive summary

• Net sales for Q2 2024 rose 36% year-over-year to $3,118.3 million, driven by higher volumes and prices across copper, molybdenum, silver, and zinc.

• Net income for Q2 2024 increased 74% year-over-year to $950.2 million, with a net income margin of 31%.

• Adjusted EBITDA for Q2 2024 was $1,797 million, up 61% year-over-year, with a margin of 58%.

• Major capital projects advanced, including the ramp-up of the Buenavista Zinc concentrator and the resumption of the Tía María copper project.

• By-product production saw strong growth: zinc up 71% year-over-year, molybdenum up 21%, and silver up 8%.

Financial highlights

• Copper production reached 242,474 tons in Q2 2024, up 7% year-over-year, with Peru up 15% and Mexico up 0.7% quarter-over-quarter.

• Operating income for Q2 2024 was $1,607.3 million, up 78.5% year-over-year.

• Operating costs rose 8% year-over-year to $1,511 million in Q2 2024.

• Operating cash cost per pound of copper, net of by-product credits, was $0.76 in Q2 2024, down 32% year-over-year.

• Cash flow from operations for H1 2024 was $1,622 million, down 18% year-over-year due to higher working capital.

Outlook and guidance

• 2024 copper production guidance is 963,200 tons, with 2025 expected at 921,000 tons and a dip in 2026 before rising above 1 million tons by 2028 as Tía María ramps up.

• Zinc production expected to increase 86% in 2024 to 121,800 tons.

• Tía María construction resumed in July 2024, with operations targeted for 2027 and significant economic and social impact projected.

• Capital investment program exceeds $15 billion, including major projects in Peru and Mexico.

• Cash costs before by-product credits expected to be around $2/lb in 2024, with potential reduction post-Tía María.