Southern Copper (SCCO) Q3 2024 earnings summary

Executive summary

• Q3 2024 net sales reached $2,930.9 million, up 17% year-over-year, driven by higher copper, zinc, and silver volumes and prices, with copper accounting for 77% of sales.

• Net income for Q3 2024 was $896.7 million, a 44.7% increase year-over-year, with a net margin of 30.6%.

• Adjusted EBITDA for Q3 2024 was $1,684.6 million, up 30.5% year-over-year, with a margin of 57.5%.

• Copper production rose 11.5% quarter-over-quarter to 252,219 tons, with significant growth in zinc and silver by-products and strong contributions from Peru and Mexico.

• Major expansion projects and ESG initiatives advanced, including progress at Tía María, Los Chancas, Michiquillay, and Buenavista Zinc, with ESG certifications awarded.

Financial highlights

• Operating income for Q3 2024 was $1,450.3 million, up 35.6% year-over-year; nine-month operating income reached $4,247.3 million, up 27.8%.

• Cash flow from operating activities in Q3 2024 was $1,440 million, up 37% year-over-year; nine-month cash flow was $3,061.2 million, up 1%.

• Capital investments in the first nine months of 2024 totaled $792 million, up 5.2% year-over-year.

• Operating costs and expenses increased 3% year-over-year, mainly due to higher repair materials, maintenance, and inventory consumption.

• Earnings per share for Q3 2024 were $1.15, up from $0.80 in Q3 2023.

Outlook and guidance

• 2024 copper production guidance is 975,000 tons, up 7% from 2023; 2025 guidance is 978,300 tons.

• Zinc production expected to reach 120,300 tons in 2024 and 154,600 tons in 2025.

• Molybdenum production forecasted at 28,200 tons in 2024 and 26,200 tons in 2025; silver at 20.8 million ounces in 2024, rising to 22.9 million ounces in 2025.

• Cash cost before by-product credits expected to remain around $2 per pound for 2024 and 2025; operating cash cost per pound of copper in Q3 2024 was $0.76, down 22.6% year-over-year.

• Management expects copper prices to remain supported by US economic resilience, Fed rate cuts, Chinese stimulus, and long-term demand from clean energy and AI trends.