Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

MarketScreener Homepage  >  Equities  >  Nyse  >  Southern Copper Corp    SCCO

SOUTHERN COPPER CORP

(SCCO)
  Report  
SummaryQuotesChartsNewsRatingsCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsOfficial PublicationsSector news

Southern Copper : SCC Reports 4Q18 Results

share with twitter share with LinkedIn share with facebook
share via e-mail
0
02/11/2019 | 05:20pm EDT

February 11, 2019

Investor Relations:

Southern Copper Corporation (NYSE and BVL: SCCO)

Raul Jacob+(602) 264-1375

southerncopper@southernperu.com.pewww.southerncoppercorp.com

  • 2018 net saleswere $7,096.7 million,the highest in our historyand 6.6% higher than 2017, principally due to higher prices of copper (+4.6% COMEX), molybdenum (+45.9%) and zinc (+1.5%). While copper sales volume remained level, by-product sales volumes increased for silver (+15.3%) and molybdenum (+3.3%).

  • 2018 Net incomewas $1,543.0 million, 111.8% higher than 2017 net income. The $814.5 million improvement in 2018 resulted mainly from higher sales and lower taxes as the 2017 financial results included a $785.9 million adjustment for the U.S. income tax reform.

  • 2018 Adjusted EBITDAwas $3,556.0 million, 8.0% higher than in 2017. The adjusted EBITDA margin in 2018 was 50.1% compared with 49.5% in 2017.

  • 2018 Copper productionincreased 0.8% compared with 2017 production as a result of higher production at the Peruvian mines of Toquepala (+15.0%) and Cuajone (+1.6%), partially offset by a decrease at the Mexican mines.Copper production in 4Q18increased 4.0% to 234,991 tons compared with 4Q17 principally due to higher production at the Toquepala mine (+20.8%), as a result of additional copper production of 8,630 tons from the new concentrator.

  • By-product production:Molybdenum production increased by 3.1% to 21,985 tons in 2018 from 21,328 tons in 2017, principally due to higher production at the Buenavista mine (+42.0%), partially offset by lower production at the Peruvian operations. Mined silver production increased by 8.7% in 2018 compared with 2017 mainly due to higher production at the Toquepala mine (+19.8%) and at our IMMSA mines (+18.7%). Mined zinc production increased 3.1% in 2018, compared with 2017 production due to higher production at our IMMSA mines. In addition, the production of all our main by-products in 4Q18 increased compared with 4Q17 (zinc, +26.8%; silver, +13.9% and molybdenum, +7.5%).

  • Operating cash costper pound of copper net of by-product revenues was $0.87 in 2018, compared to $0.92 in 2017.

  • Cash flow from operating activitiesin 2018 was $2,235.1 million, a 13.1% increase when compared to $1,976.6 million in 2017. This improvement results from the strong cash generation from operations due to higher sales volume and metal prices.

  • Capital investments in 2018were $1,121.4 million compared with $1,023.5 million in 2017. Capital investments in 2018 include $334.3 million for the Toquepala expansion.

  • Dividends:On January 24, 2019, the Board of Directors authorized adividend of $0.40per share to be paid on February 26, 2019, to shareholders of record at the close of business on February 12, 2019.

    In addition, as part of the settlement of claims brought on behalf of the Company and its shareholders against Grupo Mexico, AMC and certain current and former directors (together with Grupo Mexico and AMC, the"Defendants")a dividend of $0.44428per share will be paid on February 21, 2019 to shareholders of record at the close of business on February 11, 2019, other than the Defendants. The settlement dividend, totaling $36.5 million, plus its legal fees of $ 13.5 million, have been funded by Grupo Mexico and AMC.

Mr. German Larrea, Chairman of the Board,commenting on the Company´s progress said:"During the 4Q18 we completed the construction of the Toquepala concentrator expansion which at the end of 2018 was producing at about 60% of capacity. We expect to reach full capacity by the beginning of the 2Q19. During this year, we will see the full benefit of our Toquepala expansion and cost reduction programs in our financial results. During 2018, we obtained a cash cost reduction from $0.92 to $0.87 per pound, a 5.3% decrease, despite an increase of 16.5% in fuel cost and other materials. Considering last year´s average prices for our main products, for 2019 we expect our cash cost to average $0.80 per copper pound, an additional reduction of 8.0%, reinforcing Southern Copper'sleadership as a low-cost producer.

Southern Copper has the largest copper reserves in the industry and operates high quality world-class assets in investment grade countries such as Mexico and Peru. We are currently developing the next phase of a growth program aiming to reach a milestone copper production capacity of 1.5 million tons by 2025."

Key Financial Data

Sales

$1,694.6

Cost of salesOperating income Net income

856.8

623.5 $ 293.2

Net income marginAdjusted EBITDAAdjusted EBITDA margin Income (loss) per share Capital investments

17.3%

793.1

46.8% $ 0.38

289.5

Fourth Quarter

2017

2018

2017

$

%

$7,096.7

$6,654.5

$442.2

6.6%

3,409.0

3,252.8

156.2

4.8%

2,881.2

2,618.9

262.3

10.0%

$1,543.0

$ 728.5

$814.5

111.8%

21.7%

10.9%

10.8pp

99.1%

3,556.0

3,292.4

263.6

8.0%

50.1%

49.5%

0.8pp

1.2%

$ 2.00

$ 0.94

$ 1.06

112.8%

1,121.4

1,023.5

97.9

9.6%

$1,864.3

Twelve Months

$(169.7)

822.6

34.2

(9.1)% 4.2%

830.0 $(287.5)

(206.5) (24.9)%

$ 580.7 (202.0)%

(15.4)%

32.7pp (212.3)%

999.7

(206.6) (20.7)%

53.6% $ (0.37)

(6.8)pp (12.7)%

$ 0.75 (202.7)%

313.0

(23.5) (7.5)%

Note: Amounts in millions except per share amounts and %'s.

Capital Investments

Southern Copper's investment philosophy is not based on the outlook of copper prices but on the quality of the assets that we operate and develop. Throughout the years, our strong financial discipline has consistently allowed us to invest on a continuous basis in our superior asset portfolio.

Peruvian Projects

Our portfolio of Board approved projects in Peru has a total capital budget of $2.9 billion of which $1.8 billion have already been invested. Considering the Michiquillay ($2.5 billion) and Los Chancas ($2.8 billion) projects, our total investment program in Peru increases to $8.2 billion.

Toquepala Expansion Project-Tacna:This $1.3 billion project includes a new-state-of-the-art concentrator that will increase Toquepala´s annual copper production to 258,000 tons in 2019, a 52% production increase for this operation when compared to 2018. Through December 31, 2018, we have invested $1,243.4 million in this expansion. The construction of the project was completed and it initiated production in the 4Q18. Full production is expected to be reached by the 2Q19.

Tia Maria - Arequipa:We completed all engineering and environmental requirements, including responding to the recent 14 observations received from the Ministry of Energy and Mines in 4Q18. We expect to receive the construction license for this 120,000 ton annual SX-EW copper greenfield project with a total capital budget of $1,400 million in the first half of 2019.

In addition to our on-going social work with the communities of the Tambo valley, the Company is currently deploying its successful labor program"Forge Your Future"(Forjando Futuro) to train 700 people from the Islay Province in 2019. After training, the participants will be eligible to apply for one of the estimated 9,000 jobs (3,600 direct and 5,400 indirect) required during the Tia Maria construction phase. We believe that the initiation of construction activities for Tia Maria will generate significant economic opportunities for the Islay province and the Arequipa region.

When in operation, we expect that Tia Maria will produce 120,000 tons of copper, will generate a significant contribution through mining royalties and taxes from day one and will directly employ 600 workers and indirectly provide jobs to another 4,200.

Mexican Projects

Buenavista Zinc-Sonora:This project is located within the Buenavista facility and includes the development of a new concentrator to produce approximately 80,000 tons of zinc and 20,000 tons of copper per year. Currently, we have completed the basic engineering and are working on the purchasing process for the main project components. Water concessions have been requested. The project´s budget is $413 million, and we expect to initiate operations in 2021. When completed, this new zinc concentrator will double the Company's zinc production capacity.

Pilares-Sonora:Located 6 kilometers from La Caridad, this project consists of an open-pit mine operation with an annual production capacity of 35,000 tons of copper in concentrates. The ore will be transported from the pit to the primary crushers of the La Caridad copper concentrator through a new 25-meter wide off-road facility for mining trucks. Environmental permit studies were presented to the government´s environmental authorities and additional land is being acquired. This project will significantly improve the over-all mineral ore grade (combining the 0.78% expected from Pilares with the 0.34% from La Caridad). The budget for Pilares is $159 million and we expect it to start producing in early 2020.

Conference Call

The Company'sfourth quarter and twelve months earnings conference call will be held on Tuesday, February 12, 2019, beginning at 10:00 AM-EST (10:00 AM Lima and 09:00 AM Mexico City time).

To participate:

Dial-in number: 877-455-8486 in the U.S.

629-228-0768 outside the U.S.

Raul Jacob, SCC Vice President of Finance, Treasurer and CFO

Conference ID: 5722029and "Southern CopperCorporation Fourth Quarter 2019 EarningsResults"

Average Metal Prices

LME

Copper

Copper

Molybdenum

Zinc

Silver

Gold

($/lb.)

($/lb.)

($/lb.)

($/lb.)

($/oz.)

($/oz.)

1Q 2018

3.16

3.14

12.14

1.55

16.68

1,329.28

2Q 2018

3.12

3.09

11.55

1.41

16.50

1,306.44

3Q 2018

2.77

2.73

11.74

1.15

14.92

1,212.75

4Q 2018

2.80

2.74

11.99

1.19

14.51

1,228.09

Average 2018

2.96

2.93

11.86

1.33

15.65

1,269.14

1Q 2017

2.65

2.65

7.74

1.26

17.45

1,219.36

2Q 2017

2.57

2.58

8.00

1.18

17.19

1,256.96

3Q 2017

2.88

2.89

8.05

1.34

16.80

1,277.84

4Q 2017

3.09

3.10

8.72

1.47

16.66

1,274.35

Average 2017

2.80

2.80

8.13

1.31

17.03

1,257.13

Variance: 4Q18 vs. 3Q18

1.1%

0.4%

2.1%

3.5%

(2.7)%

1.3%

Variance: 4Q18 vs. 4Q17

(9.4)%

(11.6)%

37.5%

(19.0)%

(12.9)%

(3.6)%

Variance: 2018 vs. 2017

5.7%

4.6%

45.9%

1.5%

(8.1)%

1.0%

Source: Silver-COMEX; Gold and Zinc-LME; Molybdenum-Metals Week Dealer Oxide

COMEX

Production and Sales

Three Months Ended

December 31,Twelve Months Ended

December 31,

2018

2017

2018

%

Copper (tons)

Mined

234,991

226,027

4.0%

883,689

876,979

0.8%

3rdparty concentrate

5,811

11,280

(48.5)%

36,206

36,087

0.3%

Total production

240,802

237,307

1.5%

919,895

913,066

0.7%

Smelted

159,052

161,117

(1.3)%

633,630

617,853

2.6%

Refined and Rod

207,219

205,317

0.9%

821,187

817,794

0.4%

Sales

227,112

222,416

2.1%

885,854

888,686

(0.3)%

Molybdenum (tons)

Mined

5,657

5,260

7.5%

21,985

21,328

3.1%

Sales

5,694

5,183

9.9%

22,055

21,358

3.3%

Zinc (tons)

Mined

17,590

13,876

26.8%

70,778

68,665

3.1%

Refined

28,434

30,289

(6.1)%

107,536

104,402

3.0%

Sales

27,312

33,050

(17.4)%

106,483

107,572

(1.0)%

Silver (000s ounces)

Mined

4,299

3,775

13.9%

17,308

15,926

8.7%

Refined

3,619

3,076

17.7%

13,583

13,688

(0.8)%

Sales

5,270

3,986

32.2%

19,440

16,859

15.3%

Page5of10

%

2017

Disclaimer

Southern Copper Corporation published this content on 11 February 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 11 February 2019 22:19:06 UTC

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on SOUTHERN COPPER CORP
04/16SOUTHERN COPPER : 4.16.2019 8k reporting election of Mr. Ramon Leal Chapa as the..
PU
04/16SOUTHERN COPPER CORP/ : Change in Directors or Principal Officers (form 8-K)
AQ
04/12SOUTHERN COPPER CORPORATION : - Dividend announcement
AQ
03/14SOUTHERN COPPER : Bacanora Lithium Shares Rise on Reports Southern Copper May In..
DJ
03/01SOUTHERN COPPER COR : MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITIO..
AQ
02/15SOUTHERN COPPER : 02.15.19 SCC conference call 4Q18 transcript
PU
02/12SOUTHERN COPPER CORP/ : Other Events (form 8-K)
AQ
02/12SOUTHERN COPPER : 2.12.2019 8K reporting the state of emergency in the south of ..
PU
02/12SOUTHERN COPPER CORP/ : Results of Operations and Financial Condition, Financial..
AQ
02/12SOUTHERN COPPER : Earnings Release
PU
More news
Financials ($)
Sales 2019 7 552 M
EBIT 2019 3 081 M
Net income 2019 1 627 M
Debt 2019 4 873 M
Yield 2019 3,11%
P/E ratio 2019 17,97
P/E ratio 2020 16,29
EV / Sales 2019 4,76x
EV / Sales 2020 4,46x
Capitalization 31 069 M
Chart SOUTHERN COPPER CORP
Duration : Period :
Southern Copper Corp Technical Analysis Chart | MarketScreener
Full-screen chart
Technical analysis trends SOUTHERN COPPER CORP
Short TermMid-TermLong Term
TrendsNeutralBullishNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus HOLD
Number of Analysts 10
Average target price 39,3 $
Spread / Average Target -2,3%
EPS Revisions
Managers
NameTitle
Oscar González Rocha President, Chief Executive Officer & Director
Germán Larrea Mota-Velasco Chairman
Raúl Jacob Ruisánchez Chief Financial Officer, Treasurer & VP-Finance
Carlos Ruiz Sacristán Pemán Independent Director
Luis Miguel Palomino Bonilla Independent Director
Sector and Competitors
1st jan.Capitalization (M$)
SOUTHERN COPPER CORP27.88%31 069
GMK NORIL'SKIY NIKEL' PAO--.--%35 851
CHINA MOLYBDENUM21.01%13 539
SUMITOMO METAL MINING CO., LTD.24.95%9 416
BOLIDEN50.28%8 424
ASSORE LIMITED38.24%3 837