Executive Summary

Q1 2025 delivered broad-based strength: net sales rose 20.1% YoY to $3.12B, adjusted EBITDA increased 23.1% YoY to $1.75B, and net income climbed 28.5% YoY to $945.9M; net income margin expanded 200 bps to 30.3% .
Consensus beat: revenue, EPS, and EBITDA exceeded S&P Global estimates; revenue $3.12B vs $2.95B*, EPS $1.19 vs $1.10*, EBITDA $1.75B vs $1.67B*; management attributed outperformance to higher volumes (Cu +3.6%, Zn +42.4%, Ag +14.1%, Mo +9.9%) and better prices .
Cost tailwinds: operating cash cost, net of by-products, fell to $0.77/lb (from $1.07 in 1Q24 and $0.96 in 4Q24), supported by by‑product credits and lower operating costs; management guided 2025 cash costs to $0.75–$0.80/lb .
Guidance and capital: 2025 copper production target raised to ~968kt (vs prior ~967kt), moly lifted to ~27.4kt (vs prior ~26.2kt), zinc nudged to ~170kt (vs prior ~171.7kt); 2025 capex forecast ~$1.5B with step-ups to $2.3B in 2026 and $2.7B in 2027–2028 .
Potential catalysts: copper price resilience, continued ramp at Buenavista zinc, dividend policy ($0.70 cash + 0.0099 stock/share), and progress at Tía María; watch COMEX-LME arbitrage and U.S.–China trade policy risk (no current copper tariffs on MX/PE) .

What Went Well and What Went Wrong

What Went Well

Strong top-line and margin expansion: sales +20.1% YoY to $3.12B, adjusted EBITDA +23.1% to $1.75B, EBITDA margin up 140 bps to 55.9% .
Cost execution: cash cost net of by-products dropped to $0.77/lb, driven by lower operating costs and 22.2% growth in by-product credits, primarily zinc, silver, and moly .
Management confidence: “This quarter, SCC’s net earnings totaled $946 million…driven by higher sales and lower unit costs…cash cost decreased from $1.07 to $0.77 per copper pound (-28%)” — Chairman Germán Larrea .

What Went Wrong

Refining/smelting softness: smelted copper fell 13% YoY and refined/rod declined 2.5% YoY in the quarter; quarter-over-quarter, total mined silver sales decreased 4.2% .
Zinc refined output down 11% YoY; mined zinc fell 8.7% QoQ (IMMSA mines -15.7%) despite YoY surge from Buenavista concentrator .
Macro/policy uncertainty: management flagged risks from potential U.S.–China trade friction and COMEX-LME arbitrage dynamics; while no tariffs currently apply to MX/PE copper, the arbitrage peaked at 17% in late March .

Financial Results

Metric	Q3 2024	Q4 2024	Q1 2025
Net Sales ($USD Millions)	$2,930.9	$2,784.3	$3,121.9
Net Income ($USD Millions)	$896.7	$793.9	$945.9
Net Income Margin (%)	30.6%	28.5%	30.3%
Adjusted EBITDA ($USD Millions)	$1,684.6	$1,506.7	$1,745.6
Adjusted EBITDA Margin (%)	57.5%	54.1%	55.9%
Income per Share ($)	$1.15	$1.01	$1.19

Q1 2025 vs S&P Global Consensus (quarterly)

Metric	Actual Q1 2025	Consensus Q1 2025*	Surprise
Revenue ($USD Millions)	$3,121.9	2,953.9*	+168.0 (Beat)
EPS ($)	$1.19	1.104*	+0.086 (Beat)
Adjusted EBITDA ($USD Millions)	$1,745.6	1,665.8*	+79.8 (Beat)

Values retrieved from S&P Global*. Note: S&P’s “actual” Primary EPS shows 1.1567; SCCO’s press release reports $1.19 (GAAP basic/diluted). We anchor estimate comparisons on S&P Global while presenting company‑reported EPS .

Segment/By-product and Production KPIs

KPI	Q1 2024	Q1 2025	YoY Change
Copper Sales (tons)	235,206	243,601	+3.6%
Moly Sales (tons)	7,036	7,731	+9.9%
Zinc Sales (tons)	25,653	36,530	+42.4%
Silver Sales (000 oz)	4,954	5,653	+14.1%
Operating Cash Cost (net, $/lb)	$1.07	$0.77	-28.5%
Cash from Operations ($USD Millions)	$659.7	$721.3	+9.3%
Capital Investments ($USD Millions)	$213.8	$317.8	+48.6%

Additional Financial Statements (Q1 2025)

Item	Q1 2025
Cost of Sales ($USD Millions)	$1,319.2
Operating Income ($USD Millions)	$1,535.5
Interest Expense ($USD Millions)	$91.9
Interest Income ($USD Millions)	$48.7
Income Taxes ($USD Millions)	$532.8
Cash & Equivalents ($USD Millions)	$4,116.3
Total Debt ($USD Millions)	$7,247.0 (LT $6,747.0 + current $500.0)

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Copper Production (tons)	FY 2025	~967,000	~968,200	Raised
Molybdenum Production (tons)	FY 2025	~26,200	~27,400	Raised
Zinc Production (tons)	FY 2025	~171,700	~170,100	Lowered (slight)
Silver Production (oz)	FY 2025	~23,000,000	~23,000,000	Maintained
Operating Cash Cost (net, $/lb)	FY 2025	N/A	$0.75–$0.80	New Range
Capex ($USD Billions)	FY 2025–2028	N/A	2025: $1.5; 2026: $2.3; 2027: $2.7; 2028: $2.7	New Multi-year
Tía María Capex ($USD Millions)	2025–2027	N/A	2025: < $200; 2026: ~$980; 2027: ~$460	New Phasing
Dividend Policy	Q1 2025	$0.70 cash + 0.0073 stock (Q4)	$0.70 cash + 0.0099 stock	Increased stock dividend ratio

Earnings Call Themes & Trends

Topic	Previous Mentions (Q3’24, Q4’24)	Current Period (Q1’25)	Trend
Copper Market & Prices	Positive medium-term view; low cash costs; copper supported by macro tailwinds	LME copper +11% YoY; deficit ~300kt expected; caution on U.S.–China trade risk	Mixed: structurally positive, near-term policy risk
COMEX–LME Arbitrage	Not highlighted	Arbitrage peaked at 17% (Mar 26); some contracts on COMEX; spread now <10%	Normalizing
Cost Discipline	Cash cost $0.76/lb in Q3’24; low-cost leadership	Cash cost $0.77/lb; 2025 guide $0.75–$0.80; by-product credits strong	Improving
Buenavista Zinc	Ramp-up drove large YoY zinc gains in 3Q/4Q	Zinc mined +49% YoY; concentrator operating “at full speed”	Positive
Tía María Project	2025 construction start expected; budget review to $1.8B	Early works 61% complete; community support described as broad; capex phasing detailed	Advancing
Los Chancas	Illegal miners delaying progress; coordination with authorities	February land acquisition; arson/attacks in March; working to remove ~75 illegal miners	Challenged, moving forward
ESG/Certifications	Copper/Moly Marks in Peru; high S&P CSA score	CDP ratings maintained; social programs recognized in MX; education investments in PE	Stable/Positive
Capital Structure	$1B Minera Mexico 7-yr notes (5.625%) issued in Feb 2025	No new issuance; market timing for Tía María financing under review	Neutral

Management Commentary

“Sales increased 20%, registering growth in sales volumes for copper (+4%), zinc (+42%), silver (+14%) and molybdenum (+10%).…cash cost decreased from $1.07 to $0.77 per copper pound (-28%)” — Germán Larrea, Chairman .
“We estimate that the deficit at year-end will stand at about 300,000 metric tons.…we believe an intense commercial war between the U.S. and China will affect economic growth worldwide” — Raul Jacob .
“Buenavista zinc concentrator…is certainly operating at full speed” — Raul Jacob .
“We expect to produce 968,200 tons of copper this year, 2025.…This is 2,400 tons increase when compared to our plan of 965,000 tons” — Raul Jacob .

Q&A Highlights

Cash costs trajectory: management expects 2025 operating cash cost net of by-products in the $0.75–$0.80/lb range, contingent on by-product prices and operating discipline .
Capex phasing: 2025 ~$1.5B; 2026 ~$2.3B; 2027 ~$2.7B; 2028 ~$2.7B; Tía María-specific capex ~$<200M (2025), ~$980M (2026), ~$460M (2027) .
Product mix and TC/RC flexibility: despite favorable TC/RC for concentrates, SCCO emphasized competitiveness of smelting chain and commitments to refined copper deliveries; by-product capture (precious metals, sulfuric acid) supports value .
Trade/tariffs: no current U.S. tariffs on MX/PE copper; company would reassign volumes if tariffs were imposed; views current zero-duty status as positive given U.S. copper shortfall .
Production path: slight copper volume adjustment possible in 2026; rising with projects thereafter, crossing >1Mt in 2028–2030 .

Estimates Context

Q1 2025 delivered beats across metrics versus S&P Global consensus: revenue $3,121.9M vs $2,953.9M*, EPS $1.19 vs $1.10*, EBITDA $1,745.6M vs $1,665.8M*; beats supported by volume lifts and price strength across copper and by-products .
Prior quarter Q4 2024: revenue $2,784.3M vs consensus $2,865.6M* (miss), EPS $1.01 vs $0.99* (in-line/slight beat), EBITDA $1,506.7M vs $1,553.6M* (slight miss)* .
Model implications: with cash cost guidance at $0.75–$0.80/lb and raised copper/moly production targets, near-term EBITDA/EPS forecasts may bias upward absent adverse price/policy shocks* .

Values retrieved from S&P Global*.

Key Takeaways for Investors

Broad beat driven by volumes and pricing, with margins expanding; reinforces SCCO’s low-cost, diversified by-product advantage .
Cash cost execution remains the core differentiator; management’s $0.75–$0.80/lb 2025 guide suggests resilient profitability even under policy noise .
Buenavista zinc is a meaningful earnings lever; continued high throughput anchors by-product credits and lowers net copper costs .
Project pipeline is progressing: Tía María early works at 61% and supportive local environment; multi-year capex cadence set; financing timing will be market-dependent .
Watch trade policy headlines and COMEX-LME dynamics; no current tariffs on MX/PE copper, but arbitrage and tariff risk can affect commercial terms and customer behavior .
Dividend attractiveness persists ($0.70 cash + stock dividend); payout supported by strong operating cash flow and balance sheet liquidity .
Near-term trading: focus on copper price trajectory and by-product markets (silver, zinc, moly); medium-term thesis: volume growth plus disciplined costs and project execution underpin earnings durability .

SOUTHERN COPPER CORP/ (SCCO)·Q1 2025 Earnings Summary