SCC(US:SCCO)2025-10-29 16:00Financial Data and Key Metrics Changes - Southern Copper Corporation achieved record net sales, adjusted EBITDA, and net income in the third quarter of 2025, driven by increased byproduct production and improved metal prices [4] - Adjusted EBITDA for the third quarter was $1,975 million, a 17% increase from $1,685 million in 2024, with an adjusted EBITDA margin of 59% compared to 58% in 2024 [16][17] - Net income for the third quarter was $1,108 million, representing a 23% increase over $897 million in 2024, with a net income margin of 33% versus 31% in the same quarter last year [19][20] Business Line Data and Key Metrics Changes - Copper production decreased by 7% year-over-year to 234,892 tons in the third quarter, primarily due to lower production at Toquepala and Cojone mines [8] - Molybdenum production increased by 8% in the third quarter, driven by higher output at La Carriata and Toquepala mines [11] - Silver production increased by 16% year-over-year, with an average price of $39.56 per ounce, reflecting a 34% increase [12] - Zinc production surged by 46%, totaling 45,482 tons, mainly due to a 108% increase at the Buena Vista zinc concentrator [13][14] Market Data and Key Metrics Changes - The LME copper price rose by 7% to an average of $4.44 per pound in the third quarter, while the COMEX price increased by 14% [5][6] - Global copper inventories were estimated at 609,000 tons, covering approximately eight days of global demand [6] Company Strategy and Development Direction - The company aims to produce 1,600,000 tonnes of copper at the lowest competitive cost per tonne, with a focus on enhancing productivity and cost efficiency [5] - Significant capital investments are planned for Peruvian projects, potentially exceeding $10.3 billion over the next decade [21] - The company is prioritizing organic growth through existing projects rather than pursuing mergers and acquisitions [42] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the long-term fundamentals of copper prices despite recent U.S. tariff policy changes having limited impact [7] - The company anticipates a copper market deficit of almost 400,000 tonnes based on current supply and demand dynamics [6] - For 2026, the company forecasts copper production of approximately 911,000 tonnes, with cash costs expected to decrease due to improved production [50][51] Other Important Information - The company announced a quarterly cash dividend of $0.90 per share and a stock dividend of 0.0085 shares per common share, payable on November 28, 2025 [29][30] - Sustainability ratings have improved, with S&P Global increasing the company's rating by four points, positioning it among leaders in the mining sector [26] Q&A Session Summary Question: Expectations for cash costs in Q4 and 2026 - Management expects a decrease in cash costs for Q4 due to a partial recovery of production, estimating costs in the range of $2.15 to $2.20 per pound [32] Question: Purchases of third-party concentrate or cathodes in Q3 - The company maintained purchases of third-party concentrates to blend with its own materials but did not acquire any copper cathodes [34] Question: Company's perspective on negotiations regarding the Rio Sonora spill - Management stated that the matter is largely resolved but remains open to discussions with the government for other objectives [36] Question: Silver production guidance and potential for increased output - The company updated its silver production forecast to 23 million ounces, a 10% increase from the previous year, and is focused on maximizing output [42] Question: Impact of political changes in Peru on operations - Management reported no significant impact from the political situation in Peru and continues to monitor social circumstances [49] Question: Financing plans for the Tia Maria project - The company is evaluating financing options, including potential debt market engagement, for the Tia Maria project [58] Question: Timeline for the Los Chancas and El Arco projects - Los Chancas is expected to be the next project in execution, with Michiquillay also in line for development [59] Question: Rationale for stock dividends - The board's decision to continue stock dividends is based on maintaining cash flow while managing capital needs [81]