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Southern Copper reports 10% copper production decline in Q1, says net income up on higher metal prices

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(Kitco News) - Southern Copper (NYSE: SCCO), one of the largest copper producers worldwide, announced today that its Q1 2022 copper production decreased by 10% year-over-year to 214,480 tonnes.

The company explained that lower production was primarily driven by the stoppage of operations at Cuajone, which led production to drop 15,278 tonnes with regard to the figure in Q1 2021. The remainder of the difference was attributable to a decrease in ore grades and recoveries at other operations.

The company's Q1 2022 net sales were $2,763.8 million, which represented a 9.1% increase with regard to Q1 2021. Growth was primarily fueled by higher metal prices for all the company's main products except silver (-8.5%).

This increase was partially offset by a decrease in the sales volume of copper, molybdenum and silver. Metal prices increased for copper (+17.7%, LME); molybdenum (+69.7%); zinc (+36.0%) and gold (+4.2%).

Importantly, the company added that its Q1 2022 net income was $784.7 million, which represented a 2.7% increase when compared to the $763.8 million registered in Q1 2021. The net income margin in Q1 2022 was 28.4%, versus 30.2% in Q1 2021.

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Chairman German Larrea stated, "After 54 days, the Peruvian government declared a state of emergency in the Moquegua region and reverted the illegal seizure of our facilities. The company resumed control of the water supply and the railway, which had been vandalized by protesters.

"Thanks to the around-the-clock efforts of our operating team, the Cuajone facilities and industrial railroad are now operating at full capacity. The recognition of the fundamental right of our employees and their families to safe drinking water, and the fact that a formal dialogue process with the communities will shortly begin, bodes well for a satisfactory solution for all concerned."

Southern Copper is one of the largest integrated copper producers in the world. The company believes it currently has the largest copper reserves in the industry. The company is 88.9% owned by Grupo Mexico. The company operates mining units and metallurgical facilities in Mexico and Peru and conducts exploration activities in Argentina, Chile, Ecuador, Mexico and Peru.

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