Southern Copper reports strong Q3 2020 operational and financial results despite the impacts of COVID-19 pandemic


  • 3Q20 net sales were $2,129.1 million, up 14.5% with regard to 3Q19. This growth was attributable to both an increase in sales and in copper and silver market prices. Sales volumes were up for copper (+2.1%), molybdenum (+10.7%), zinc (+7.0%) and silver (+0.2%) and improvements were reported for both silver prices (+44.8%) and copper prices (+12.5% – LME). Metal prices fell for molybdenum (-35.6%), which partially offset the contribution of additional sales volumes. In 9M20, net sales increased 3.7% with regard to those registered in 9M19.
  • 3Q20 net income of $506.0 million was 29.9% higher than the 3Q19’s net income. The net income margin in the 3Q20 was 23.8% versus 21.0% in the 3Q19. This increase was mainly attributable to higher sales. On a QoQ basis, net income was 95.0% higher than in the 2Q20.
  • Cash flow from operating activities in the 9M20 was $1,688.0 million, which represented an increase of 23.2% over the $1,370.5 million posted in the 9M19. This improvement was attributable to strong cash generation at our operations, due to an increase in both sales volumes and cost control efficiencies.
  • 3Q20 adjusted EBITDA was $1,125.9 million, which represented an increase of 24.0% with regard to the $907.7 million registered in 3Q19. The adjusted EBITDA margin in 3Q20 was situated at 52.9% versus 48.8% in 3Q19. On a QoQ basis, EBITDA was 46.2% higher than in 2Q20.
  • Copper production in 3Q20 decreased to 246,560 tons, 2.3% below the result reported in 3Q19. This was principally due to a decrease in production at our Peruvian mines (-8.6%),which was in turn attributable to lower ore grades. Copper production was partially offset by a 2.3% increase in production at our Buenavista mine in Mexico. In 9M20, copper production reported a slight increase (+0.6%) when compared to the same period in 2019. This was attributable to an increase in production at Cuajone (+8.6%) due to higher ore grades and recoveries as well as to growth in production at both Caridad (+2.1%) and the IMMSA mines (+31.2%). This was offset by lower production at the Buenavista (-2.6%)and Toquepala mines (-0.5%)due to lower ore grades.
  • By-productproduction: Molybdenum production increased (+7.8%) in 3Q20 compared with 3Q19 due to an increase in production at our Peruvian mines (+23.7%), which registered higher grades and recoveries, and to higher production at La Caridad mine (+4.4%). Molybdenum production was partially offset by lower production at our Buenavista mine (-18.2%). Mined silver production decreased by 1.3% in 3Q20 compared with 3Q19 due to a decrease in production at the Toquepala (-8.2%), Buenavista (-4.6%) and IMMSA (-3.0%) operations. This was offset by higher production at La Caridad (+23.4%) and Cuajone mines (+2.6%). For zinc, in spite of an increase in production of 1,315 tons at the San Martin mine, other IMMSA zinc operations reported a decrease in production, yielding a slight decrease of 0.4% in 3Q20 compared with 3Q19.

Mr. German Larrea, Chairman of the Board, commenting on the Company´s progress and current circumstances said:

“Despite the current volatile economic environment and the impacts of COVID-19 pandemic, SCC’s quarterly results clearly show our strong operational and financial position with a competitive $0.65 cash cost per pound, net of byproduct credits. We continue to hold the effects of the pandemic at bay and are successfully developing our projects despite the current challenging environment. Our Company has been operating in total compliance with local, regional and national emergency measures, and now our workforce is gradually returning to work at all of our facilities.
We have a positive view on the evolution of the copper market, sustained by consumption growth in China and other emerging economies. We consistently share the benefits of SCC’s operations with our shareholders through dividends while, simultaneously, focusing on generating additional long-term value by driving highly competitive projects and cost reduction efforts. We are also committed to promoting the development of the local communities, regions and countries where we operate to share prosperity in a safe and sustainable environment, while promoting the wellbeing of these communities.”

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