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01/10 01:08
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with increased zinc production and decreased operating cash costs. The Q&A section highlights confidence in future projects and organic growth, despite some vague responses. Positive aspects include increased cash flow, cash position, and strategic plans for future production. The lack of major negative concerns or uncertainties, combined with optimistic guidance, suggests a positive short-term stock price movement.
Net Sales $3.4 billion in Q3 2025, a 15% increase year-over-year due to higher byproduct production and improved metal prices.
Adjusted EBITDA $1,975 million in Q3 2025, a 17% increase year-over-year, with a margin of 59% (up from 58% in Q3 2024), driven by increased sales and cost containment.
Net Income $1,108 million in Q3 2025, a 23% increase year-over-year, with a margin of 33% (up from 31% in Q3 2024), due to higher sales and cost control.
Copper Production 234,892 tons in Q3 2025, a 7% decrease year-over-year due to lower ore grades and production shifts in Peruvian and Mexican operations.
Molybdenum Production 8% increase year-over-year in Q3 2025, driven by higher production at La Caridad and Toquepala mines.
Silver Production 16% increase year-over-year in Q3 2025, attributed to growth in Mexican operations.
Zinc Production 45,482 tons in Q3 2025, a 46% increase year-over-year, driven by a 108% production increase at the Buenavista zinc concentrator.
Operating Cash Cost (Copper) $0.42 per pound in Q3 2025, 34% lower than Q2 2025, due to increased byproduct credits.
Cash Flow from Operating Activities $1,560 million in Q3 2025, an 8.4% increase year-over-year, driven by higher net sales.
Zinc production: Increased by 46%, driven by significant production at the Buenavista zinc concentrator.
Silver production: Increased by 16%, with refined silver production up by 2%.
Molybdenum production: Increased by 8%, driven by higher production at La Caridad and Toquepala mines.
Copper market deficit: Estimated deficit of almost 400,000 tons due to production issues in Indonesia and Chile.
Copper prices: LME copper price increased by 7% to $4.44 per pound, and COMEX price increased by 14%.
Cash cost of copper: Achieved $0.42 per pound, one of the industry's lowest.
Net sales: Reached $3.4 billion in Q3 2025, a 15% increase from Q3 2024.
Adjusted EBITDA: Increased by 17% to $1,975 million in Q3 2025, with a margin of 59%.
Tia Maria project: Progress at 23%, with 2,109 new jobs created. Construction phase expected to generate 3,500 jobs.
Los Chancas project: Social and environmental management programs underway, addressing illegal miner issues.
Michiquillay project: Geological models being audited, with hydrogeological and geotechnical studies ongoing.
Copper Production Decrease: Copper production decreased by 7% in the third quarter of 2025 compared to the same period in 2024, driven by lower ore grades and operational shifts in Peruvian and Mexican mines. This could impact revenue and operational efficiency.
Ore Grade Challenges: Lower ore grades in key mines, including Buenavista, Toquepala, and Cuajone, have negatively affected production levels, posing a challenge to maintaining cost efficiency and output targets.
Cost Increases: Operating costs and expenses increased by 9% compared to the third quarter of 2024, driven by higher costs in purchased copper concentrate, labor, energy, and contractor services. This could pressure profit margins.
Illegal Mining Activities: The Los Chancas project in Peru faces challenges from illegal mining activities, which hinder project development and could delay timelines and increase costs.
Regulatory and Social Risks: The Tia Maria project in Peru, while progressing, faces potential risks related to regulatory approvals and social opposition, which could disrupt timelines and increase costs.
Supply Chain and Maintenance Disruptions: Lower sulfuric acid volumes due to major maintenance at smelters have impacted by-product credits, potentially affecting overall profitability.
Copper Production: For 2025, the company expects to produce 960,000 tons of copper, which is slightly lower (less than 1%) than the plan and represents a 2% decrease compared to 2024's financial plan.
Molybdenum Production: The company expects to produce 30,000 tons of molybdenum in 2025, representing a 4% increase over 2024 production levels.
Silver Production: The company expects to produce 23 million ounces of silver in 2025, reflecting a 10% increase compared to 2024.
Zinc Production: The company expects to produce 174,700 tons of zinc in 2025, representing a 34% increase over 2024 production levels. This growth will be driven by the Buenavista zinc concentrator operating at full capacity.
Copper Market Outlook: The company estimates a copper market deficit of almost 400,000 tons due to negative production effects in Indonesia and Chile. Copper inventories worldwide cover approximately 8 days of global demand. Long-term fundamentals for copper prices are expected to remain very positive.
Tia Maria Project: The Tia Maria project in Peru is expected to generate 3,500 jobs during construction and 764 direct jobs and 5,900 indirect jobs upon starting operations in 2027. Pre-stripping activities and construction of main project components will begin soon.
Los Chancas Project: Social and environmental management programs are underway, and actions are being taken to regain control of the project from illegal miners to advance development.
Michiquillay Project: Geological models are being audited, and a conceptual study is underway to determine the best location for tailings storage. Hydrogeological and geotechnical studies are also being conducted.
Mexican Projects: The company is conducting talks with the Mexican administration to continue rolling out investments worth $10.2 billion. Projects include Angangueo, Chalchihuites, and the Empalme Smelter, which could enhance the company's position as a fully integrated copper producer.
Quarterly cash dividend: Southern Copper Corporation announced a quarterly cash dividend of $0.90 per share of common stock.
Stock dividend: A stock dividend of 0.0085 shares of common stock per share was announced.
Payment date: The dividends will be payable on November 28, 2025, to shareholders of record at the close of business on November 12, 2025.
The earnings call reveals strong financial performance with increased zinc production and decreased operating cash costs. The Q&A section highlights confidence in future projects and organic growth, despite some vague responses. Positive aspects include increased cash flow, cash position, and strategic plans for future production. The lack of major negative concerns or uncertainties, combined with optimistic guidance, suggests a positive short-term stock price movement.
The earnings call presents a mixed picture. Positive financial metrics include a 20% YoY increase in net sales and a 29% increase in net income, suggesting strong performance. However, regulatory issues, community protests, and potential production risks in 2026 present concerns. The Q&A reveals cautious management of cash flow and a positive copper demand outlook, but also highlights risks like tariffs and unclear contract details. Despite a dividend announcement, the lack of new partnerships or significant guidance changes tempers overall sentiment. Thus, the stock price is expected to remain stable within the next two weeks.
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