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SOUTHERN COPPER CORP/ (SCCO)·Q4 2024 Earnings Summary

Executive Summary

  • Q4 2024 net sales were $2.78B, up 21.3% YoY ($2.30B in Q4 2023) but down 5.0% QoQ ($2.93B in Q3 2024); net income was $0.79B with a 28.5% margin, and adjusted EBITDA was $1.51B with a 54.1% margin .
  • Operating cash cost net of by-product credits rose to $0.96/lb from $0.76/lb in Q3, reflecting lower by‑product credits QoQ, though FY 2024 net cash cost improved to $0.89/lb YoY .
  • Board authorized a quarterly cash dividend of $0.70/share and a stock dividend of 0.0073 shares per share (payable Feb 27, 2025), and Minera Mexico issued $1.0B 7-year notes at 5.625% (due 2032) to support capex and liquidity .
  • 2025 guidance: copper ~967k tons (slight reduction vs prior), zinc ~171.7k tons (raised), silver ~23.0M oz (raised), molybdenum ~26.2k tons (maintained); a potential narrative catalyst is execution on Tía María construction and Buenavista Zinc ramp-through .

What Went Well and What Went Wrong

What Went Well

  • Record 2024 net sales of $11.43B (+15.5% YoY) driven by higher volumes in copper, zinc, silver and favorable metal prices; net income grew 39.2% to $3.38B with adjusted EBITDA +27.4% to $6.41B .
  • By-product momentum: Q4 zinc sales +59.4% YoY and silver sales +21.6% YoY; Buenavista Zinc full ramp supported mined zinc +154.9% YoY in Q4 .
  • Management tone confident: “We are pleased with 2024 results… strong sales growth… strict cost control measures,” and outlined 2025 production plans and advancing major projects (Tía María, Los Chancas, Michiquillay, El Arco) .

What Went Wrong

  • QoQ softness: revenue fell from $2.93B (Q3) to $2.78B (Q4); adjusted EBITDA margin compressed to 54.1% from 57.5% QoQ, and EPS slipped to $1.01 from $1.15 .
  • Operating cash cost net rose QoQ to $0.96/lb (from $0.76/lb), implying less by‑product offset vs Q3 despite favorable YoY trends .
  • Operational headwinds: Toquepala processing decreased due to biannual preventive maintenance and molybdenum production declined 2.6% YoY in Q4, partially offset elsewhere .

Financial Results

MetricQ4 2023Q3 2024Q4 2024
Revenue ($USD Billions)$2.296 $2.931 $2.784
Net Income attributable to SCC ($USD Billions)$0.445 $0.897 $0.794
EPS ($USD)$0.58 $1.15 $1.01
Adjusted EBITDA ($USD Billions)$1.056 $1.685 $1.507
Net Income Margin (%)19.4% 30.6% 28.5%
Adjusted EBITDA Margin (%)46.0% 57.5% 54.1%
Capital Investments ($USD Millions)$255.3 $246.4 $235.3

Segment/product sales volumes (tons and 000s oz):

MetricQ4 2023Q3 2024Q4 2024
Copper Sales (tons)217,416 242,028 229,206
Molybdenum Sales (tons)7,158 7,327 7,008
Zinc Sales (tons)26,419 37,355 42,120
Silver Sales (000s oz)4,436 5,259 5,392

Key KPIs and cost drivers:

KPIQ4 2023Q3 2024Q4 2024
Operating Cash Cost before by-products ($/lb)$2.231 (223.1¢) $1.955 (195.5¢) $2.325 (232.5¢)
Operating Cash Cost net of by-products ($/lb)$1.25 $0.76 $0.96
Avg LME Copper Price ($/lb)3.71 4.17 4.16
Avg Silver Price ($/oz)23.25 29.43 31.36
Avg Zinc Price ($/lb)1.13 1.26 1.38
Avg Moly Price ($/lb)18.41 21.68 21.61

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Copper production (tons)2025978,300 967,000 Lowered
Zinc production (tons)2025154,600 171,700 Raised
Silver production (million oz)202522.9 23.0 Raised
Molybdenum production (tons)202526,200 26,200 Maintained
DividendQ1 2025 (paid Feb 27, 2025)$0.70 cash + 0.0062 stock (Nov 21, 2024) $0.70 cash + 0.0073 stock Raised stock ratio
Financing2032 maturityN/A$1.0B 7-year notes at 5.625% (issued Feb 5, 2025) New issuance
Minera Mexico capex2025N/A>$600M planned across operations (modernization, water/tailings) New disclosed plan

Earnings Call Themes & Trends

TopicPrevious Mentions (Q2 2024)Previous Mentions (Q3 2024)Current Period (Q4 2024)Trend
Copper demand/macroDecarbonization and AI supporting demand; expected 2024 deficit ~217k tons Resilient U.S., China stimulus; long-term copper demand supported by AI/decarbonization Metal price tailwinds; record sales on higher volumes and prices Supportive backdrop; demand narrative stable/positive
Operating cash costNet cash cost $0.76/lb; by-product credits strong Net cash cost $0.76/lb; before by-products ~$2/lb guidance Net cash cost $0.96/lb; FY 2024 $0.89/lb; YoY improved, QoQ higher YoY improvement; QoQ pressure from credits
Buenavista Zinc rampRamp completed; expected ~55.4k tons 2024 +91% mined zinc YoY; continued ramp +154.9% mined zinc YoY in Q4; full ramp confirmed Strong execution; volumes rising
Tía María projectActivities resumed; construction in 2025; 2027 startup target Budget review and social acceptance improving Budget set at ~$1,802M; construction to begin this year; job creation detailed Advancing toward build phase
Regulatory/ESGRenewable energy procurement; certifications in Mexico Copper/Moly Marks in Peru; ESG recognitions S&P Global CSA top-tier sustainability rating; tailings standard adoption ESG profile strengthening
Water/tailings (Mexico)Noted water scarcity impact earlier; improving Water needs met; pipeline permitting ongoing 2025 capex includes 43% for water/tailings improvements Proactive mitigation and investment

Management Commentary

  • “We are pleased with 2024 results, with net sales hitting a record of $11,433 million… strong sales growth was accompanied by strict cost control measures, yielding net income of $3,377 million for 2024” — Chairman Germán Larrea .
  • 2025 production outlook: “We expect to maintain… producing 967,000 tons [copper]… 171,700 tons of zinc (+32%), 23 million ounces of silver (+10%) and 26,200 tons of molybdenum (-10%)” .
  • Capital and projects: Minera Mexico plans >$600M 2025 capex focused on modernization and water/tailings; Tía María budget updated to ~$1,802M with construction commencing and detailed local job creation plans .

Q&A Highlights

  • Q4 2024 earnings call transcript was not available in the document tool; Q&A highlights cannot be synthesized at this time. We will update when the transcript is accessible .

Estimates Context

  • Wall Street consensus (S&P Global) for Q4 2024 EPS and revenue was unavailable due to data access limits at the time of request; therefore, we cannot provide vs-consensus comparisons. Values would normally be retrieved from S&P Global.

Key Takeaways for Investors

  • Momentum intact into year-end: Q4 delivered strong YoY growth (sales +21%, EBITDA +43%) despite QoQ normalization; product mix (zinc, silver) and price backdrop supported results .
  • Watch cost dynamics: Net cash cost rose QoQ to $0.96/lb; near-term stock narrative may hinge on by‑product price/volume credits stabilizing and operational normalization post maintenance at Toquepala .
  • 2025 production guide reset: Copper slightly trimmed (967k), zinc and silver raised — constructive for by‑product credits and margin resilience; monitor execution vs these targets for revisions risk or upside .
  • Capital structure/liquidity: $1.0B 7-year issuance at 5.625% strengthens funding for Mexican capex and corporate purposes; dividend policy maintained with a modestly higher stock component, balancing growth funding with returns .
  • Project pipeline catalysts: Tía María construction start and Buenavista Zinc throughput are key medium-term drivers; permitting, social acceptance, and infrastructure (rail/road, water) execution are risk factors to track .
  • ESG/tailings investments and S&P CSA recognition improve the non-financial profile, potentially broadening investor appeal and de-risking operations .
  • Near-term trading: With QoQ margin compression and higher net cash cost, the tape may react to updates on by‑product pricing and operational cadence; medium-term thesis leans on volume growth, cost discipline, and project execution .