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][15] - Net income for 2025 was $4.3 billion, which is 28% higher than in 2024 [19][20] - Operating cash cost per pound of copper before by-product credit was $2.17, up from $2.13 in 2024 [18] Business Line Data and Key Metrics Changes - Copper production decreased by 1.8% in 2025 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% in Q4 2025, averaging $54.48 per ounce [10][11] - Zinc prices increased by 4.3% in Q4 2025, averaging $1.44 per pound [12] Company Strategy and Development Direction - The company aims to produce 1.6 million tons of copper at the lowest competitive cost per ton [5] - Southern Copper is focusing on enhancing productivity and cost efficiency while investing over $20.5 billion in capital projects in Peru and Mexico [20][21] - The Tia Maria project is currently under construction, with an estimated capital budget of $1.8 billion and expected to generate significant economic benefits upon completion [21][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 strong production levels despite challenges in ore grades at certain operations [59][88] - Management believes that the inflationary pressures have stabilized, with currency appreciation being a more significant factor affecting costs than inflation itself [31][32] Other Important Information - The company received various ESG accreditations, including the Copper Mark for compliance with tailings management standards [26][27] - Southern Copper announced a quarterly cash dividend of $1 per share, payable on February 27, 2026 [28] Q&A Session Summary Question: Cost guidance and inflation impact - Management indicated that inflation has stabilized, with currency appreciation being a more significant concern [31][32] Question: Silver production expectations for 2026 - Management confirmed a guidance of 24 million ounces for silver production in 2026, with potential for improvement based on ore grades [34][35] Question: Molybdenum production decline reasons - Management explained that lower ore grades at certain operations are expected to impact molybdenum production in 2026 [40][42] Question: Tia Maria project capital expenditure timing - Management expects to disburse approximately $508 million for Tia Maria in 2026, with construction completion anticipated by mid-2027 [46][50] Question: Long-term production guidance - Management provided a forecast of 911,400 tons for 2026, with expectations for gradual increases in subsequent years [59][60] Question: Copper market dynamics and price sustainability - Management noted a potential copper market deficit and highlighted the impact of demand from electric vehicles and AI [77][78] Question: Strategy for Buenavista concentrator - Management confirmed the focus on zinc production due to favorable ore grades, with flexibility to shift back to copper if price dynamics change [80][81]