SCC(US:SCCO)2026-01-28 16:02Financial Data and Key Metrics Changes - Southern Copper achieved record net sales of $13.4 billion in 2025, a 17% increase from 2024 [4][13] - Adjusted EBITDA reached a record high of $7.8 billion, reflecting a 22% increase over 2024 [5][16] - Net income for 2025 was $4.3 billion, which is 28% higher than the previous year [19][20] - Operating cash cost per pound of copper before by-product credit was $2.17, a slight increase from $2.13 in 2024 [18] Business Line Data and Key Metrics Changes - Copper production for 2025 decreased by 1.8% to 956,270 tons, slightly below the planned 965,000 tons [8] - Molybdenum production increased by 7.4% year-over-year in 2025, totaling 31,200 tons [10] - Silver production rose by 15% in 2025, reaching 24 million ounces [11] - Zinc production increased by 36% in 2025, totaling 165,500 tons [12] Market Data and Key Metrics Changes - The average copper price on the London Metal Exchange increased by 21% to $5.03 per pound in Q4 2025 [5][6] - Molybdenum prices averaged $22.75 per pound in Q4 2025, a 5% increase from the previous year [9] - Silver prices surged by 74% to an average of $54.48 per ounce in Q4 2025 [10][11] - Zinc prices increased by 4.3% to $1.44 per pound in Q4 2025 [11] Company Strategy and Development Direction - The company aims to produce 1.6 million tons of copper at the lowest competitive cost per ton [5] - Significant capital investments exceeding $20.5 billion are planned for projects in Peru and Mexico [20][21] - The Tia Maria project is currently 24% complete and is expected to generate $20.2 billion in exports over its first 20 years [22] Management's Comments on Operating Environment and Future Outlook - Management anticipates a copper market deficit of about 320,000 tons for 2026, influenced by demand from electric vehicles and AI power centers [6][77] - The company is optimistic about maintaining production levels despite lower ore grades at some operations [59] - Management noted that inflation impacts are being mitigated by currency appreciation rather than specific inflation [31] Other Important Information - The company received accreditation from the Copper Mark for compliance with global industry standards on tailings management [26] - A quarterly cash dividend of $1 per share was announced, payable on February 27, 2026 [28] Q&A Session Summary Question: Any updated thoughts on cost guidance? - Management indicated that costs are currently more affected by currency appreciation than inflation [31] Question: Guidance on costs for the next quarter or year? - Costs are expected to remain relatively flat on a per-pound basis, with strong by-product production helping to offset any increases [33] Question: Ability to increase silver production in 2026? - Current guidance for silver production is about 24 million ounces, with potential for improvement based on ore grades [34][35] Question: Reasons for expected decline in molybdenum production in 2026? - Lower ore grades at operations are anticipated to impact molybdenum production [42] Question: Update on Tia Maria project CapEx? - The company plans to disburse approximately $508 million for Tia Maria in 2026, with construction expected to finish by mid-2027 [46][50] Question: Long-term production guidance? - Production is expected to be around 911,400 tons for 2026, with gradual increases projected in subsequent years [59][60] Question: Impact of higher copper prices on project development? - Higher prices generally facilitate project development, but also incentivize illegal mining [70] Question: Current sentiment regarding project licenses in Mexico? - The relationship with the Mexican government is improving, which may expedite project approvals [97]