(Kitco News) - One of the world’s largest copper and gold producers reported a strong first half of the year as higher commodity prices offset some shipping delays.
On Tuesday, ahead of the North American trading session, Freeport (NYSE: FCX) reported second-quarter 2024 net income attributable to common stock of $616 million, or $0.42 per share, and adjusted net income attributable to common stock of $667 million, or $0.46 per share, after excluding net charges totaling $51 million, or $0.04 per share, primarily associated with nonrecurring labor-contract charges at Cerro Verde and revisions to environmental obligation estimates.
The company’s earnings solidly beat consensus expectations, with equity analysts predicting $0.38 per share.
While Freeport is considered a senior copper miner, it produces a significant amount of gold.
The company said that it produced 1 billion pounds of copper, 361,000 ounces of gold, and 21 million pounds of molybdenum in the second quarter of 2024. Production was roughly unchanged compared to the second quarter of 2023.
However, the company noted that its copper and gold sales were down compared to last year due to shipping delays in Indonesia associated with the timing of renewing export licenses.
The company said that it sold 931,000 pounds of copper and 361,000 ounces of gold in the second quarter, down 10% and 28% respectively compared to 2023. Sales of molybdenum were roughly unchanged at 21,000 pounds.
“Consolidated copper and gold production volumes for 2024 are expected to exceed 2024 sales volumes, reflecting the deferral of approximately 100 million pounds of copper and 120 thousand ounces of gold that will be processed by PT-FI’s new downstream processing facilities and sold as refined metal in 2025,” the company said.
While copper and gold sales were down between April and June, commodity prices were dramatically higher. The company said it saw an average realized copper price of $4.48 per pound, up more than 16% from the second quarter of 2023. At the same time, the company saw an average realized gold price of $2,299 an ounce, up 18% from last year.
Higher prices helped improve the company’s cash flow, which the company continues to use to buy back shares. The company said that it bought $59 million in shares between April and June, bringing total purchases to $1.9 billion of its $5 billion buy-back program.
Looking ahead, the company said that it continues to expect solid production through 2024.
“Our team reached an important milestone in Indonesia during the quarter with the start of commissioning of our major new copper smelter, and we are working to execute a safe and efficient ramp-up to full capacity by the end of the year. This strategically important investment is integral to support our long-term, high-quality operations in the Grasberg minerals district. Copper pricing was strong in the second quarter. The long-term outlook for copper is supported by copper’s increasingly important role in the global economy and limited available supplies to meet growing demand. Freeport is well-positioned for the future as a leading, responsible producer of copper with multiple options for future growth and an experienced and innovative team with a track record of accomplishment,” said Richard Adkerson, Chairman of the Board, and Kathleen Quirk, President and Chief Executive Officer, in a statement.
