SOUTHERN COPPER CORP/ [SCCO] Filings

10-Q 1 scco-20240630x10q.htm 10-Q

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒

QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended: June 30, 2024

☐

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number: 1-14066

SOUTHERN COPPER CORPORATION

(Exact name of registrant as specified in its charter)

Delaware		13-3849074
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

7310 North 16th St, Suite 135 Phoenix, AZ		85020
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (602) 264-1375

Securities registered pursuant to Section 12(b) of the Act:

Title of each class:

Trading Symbol

Name of each exchange on which registered:

Common stock, par value $0.01 per share

SCCO

New York Stock Exchange

Lima Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ⌧ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ⌧ No ◻

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No ⌧

As of July 30, 2024 there were outstanding 781,159,261 shares of Southern Copper Corporation common stock, par value $0.01 per share.

Table of Contents

Southern Copper Corporation (“SCC”)

INDEX TO FORM 10-Q


		Page No.
Part I. Financial Information:

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	3

	Condensed Consolidated Statements of Earnings for the three and six-month period ended June 30, 2024 and 2023	3

	Condensed Consolidated Statements of Comprehensive Income for the three and six-month period ended June 30, 2024 and 2023	4

	Condensed Consolidated Balance Sheets as of June 30, 2024 and December 31, 2023	5

	Condensed Consolidated Statements of Cash Flows for the three and six-month period ended June 30, 2024 and 2023	6

	Condensed Consolidated Statements of Changes in Equity for the three and six-month period ended June 30, 2024 and 2023	7

	Notes to Condensed Consolidated Financial Statements	8-35

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	37-58

Item 3.	Quantitative and Qualitative Disclosure about Market Risk	59-60

Item 4.	Controls and procedures	61

	Report of Independent Registered Public Accounting Firm	62

Part II. Other Information:

Item 1.	Legal Proceedings	63

Item 1A.	Risk Factors	63

Item 2.	Unregistered Sale of Equity Securities and Use of Proceeds	63

Item 4.	Mine Safety Disclosures	63

Item 6.	List of Exhibits	64-67


	Signatures	68

Table of Contents

PART I — FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements

Southern Copper Corporation

CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023

	(in millions, except for per share amounts)
Net sales (including sales to related parties, see note 5)	$	3,118.3	$	2,300.7	$	5,718.1	$	5,094.6
Operating cost and expenses:
Cost of sales (exclusive of depreciation, amortization and depletion shown separately below)		1,248.9		1,147.7		2,406.5		2,341.9
Selling, general and administrative		33.9		31.0		64.8		61.4
Depreciation, amortization and depletion		209.6		209.2		418.6		412.9
Exploration		18.6		12.1		31.2		24.0
Total operating costs and expenses		1,511.0		1,400.0		2,921.1		2,840.2

Operating income		1,607.3		900.7		2,797.0		2,254.4

Interest expense		(94.1)		(94.0)		(188.3)		(188.2)
Capitalized interest		10.8		12.4		24.5		23.9
Other income (expense)		(19.9)		5.6		(0.9)		16.1
Interest income		26.5		23.2		53.8		44.5
Income before income taxes		1,530.6		847.9		2,686.2		2,150.7
Income taxes (including royalty taxes, see Note 4)		578.8		294.5		1,002.1		774.9
Net income before equity earnings of affiliate		951.8		553.4		1,684.0		1,375.8
Equity (loss) earnings of affiliate, net of income tax		2.0		(3.8)		8.6		(10.2)
Net income		953.8		549.6		1,692.6		1,365.6
Less: Net income attributable to the non-controlling interest		3.6		2.1		6.4		4.9
Net income attributable to SCC	$	950.2	$	547.5	$	1,686.2	$	1,360.7
Per common share amounts attributable to SCC:
Net earnings-basic and diluted	$	1.22	$	0.71	$	2.17	$	1.76

Weighted average shares outstanding-basic and diluted		777.9		773.1		775.5		773.1

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

Southern Copper Corporation

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023

	(in millions)
COMPREHENSIVE INCOME:
Net income and comprehensive income	$	953.8	$	549.6	$	1,692.6	$	1,365.6
Other comprehensive income (loss) net of tax:
Total other comprehensive income (loss)		—		—		—		—
Total comprehensive income		953.8		549.6		1,692.6		1,365.6
Comprehensive income attributable to the non-controlling interest		3.6		2.1		6.4		4.9
Comprehensive income attributable to SCC	$	950.2	$	547.5	$	1,686.2	$	1,360.7

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

Southern Copper Corporation

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


	June 30,		December 31,
	2024		2023

	(in millions)
ASSETS
Current assets:
Cash and cash equivalents	$	1,875.3	$	1,151.5
Short-term investments		329.1		599.3
Accounts receivable trade		1,622.3		1,141.1
Accounts receivable other (including related parties 2024- $16.9 and 2023 - $27.3)		81.7		87.2
Inventories		1,017.2		1,016.9
Prepaid taxes		381.4		395.4
Other current assets		26.7		38.1
Total current assets		5,333.7		4,429.5

Property and mine development, net		9,871.5		9,782.9
Ore stockpiles on leach pads		1,146.4		1,121.7
Intangible assets, net		127.3		130.2
Right-of-use assets		745.4		775.4
Deferred income tax		269.0		256.1
Equity method investment		114.5		108.2
Other non-current assets		169.9		121.3
Total assets	$	17,777.7	$	16,725.3

LIABILITIES
Current liabilities:
Current portion of long-term debt	$	499.5	$	—
Accounts payable (including related parties 2024- $61.8 and 2023- $93.6)		647.2		652.6
Accrued income taxes		364.8		278.3
Accrued workers’ participation		159.2		245.7
Accrued interest		97.1		97.1
Lease liabilities current		76.9		78.0
Other accrued liabilities		53.5		36.8
Total current liabilities		1,898.2		1,388.5

Long-term debt		5,757.0		6,254.6
Lease liabilities		668.5		697.4
Deferred income taxes		158.8		132.2
Non-current taxes payable		80.7		92.7
Other liabilities and reserves		35.1		66.2
Asset retirement obligation		619.2		612.5
Total non-current liabilities		7,319.3		7,855.6

Commitments and contingencies (Note 10)
STOCKHOLDERS’ EQUITY (NOTE 11)
Common stock par value $0.01; shares authorized, 2024 and 2023–2,000; shares issued, 2024 and 2023–884.6		8.8		8.8
Additional paid-in capital		4,256.9		3,532.8
Retained earnings		7,180.9		7,033.5
Accumulated other comprehensive income		(8.0)		(8.0)
Treasury stock, at cost, common shares		(2,946.2)		(3,149.0)
Total Southern Copper Corporation stockholders’ equity		8,492.5		7,418.1
Non-controlling interest		67.7		63.1
Total equity		8,560.2		7,481.2
Total liabilities and equity	$	17,777.7	$	16,725.3

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

Southern Copper Corporation

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,
	2024		2023		2024		2023

	(in millions)
OPERATING ACTIVITIES
Net income	$	953.8	$	549.6	$	1,692.6	$	1,365.6
Adjustments to reconcile net earnings to net cash provided from operating activities:
Depreciation, amortization and depletion		209.6		209.2		418.6		412.9
Equity earnings of affiliate, net of dividends received		(0.6)		4.2		(6.4)		10.6
Loss (gain) on foreign currency transaction effect		(8.1)		4.6		(4.3)		11.1
Provision for deferred income taxes		4.0		24.7		23.2		6.3
Other, net		5.5		7.0		11.1		14.5
Change in operating assets and liabilities:
Decrease (increase) in accounts receivable		(328.3)		194.7		(481.2)		326.2
(Increase) decrease in inventories		(16.7)		(14.0)		(24.9)		15.6
(Decrease) in accounts payable and accrued liabilities		(145.6)		(185.5)		6.2		(172.8)
Decrease (increase) in other operating assets and liabilities		288.5		2.6		(13.1)		(7.7)
Net cash provided by operating activities		962.1		797.1		1,621.8		1,982.3
INVESTING ACTIVITIES
Capital expenditures		(331.8)		(252.5)		(545.6)		(490.6)
Proceeds from sale of short-term investments, net		0.1		140.3		270.1		208.0
Other		—		0.1		—		0.1
Net cash used in investing activities		(331.7)		(112.1)		(275.5)		(282.5)
FINANCING ACTIVITIES
Cash dividends paid to common stockholders		—		(773.1)		(618.5)		(1,546.2)
Other, net		—		(2.7)		(1.6)		(4.3)
Net cash used in financing activities		—		(775.8)		(620.1)		(1,550.5)
Effect of exchange rate changes on cash and cash equivalents		(7.3)		(10.0)		(2.4)		(20.0)
(Decrease) increase in cash and cash equivalents		623.1		(100.8)		723.8		129.3
Cash and cash equivalents, at beginning of period		1,252.2		2,299.8		1,151.5		2,069.7
Cash and cash equivalents, at end of period	$	1,875.3	$	2,199.0	$	1,875.3	$	2,199.0

The accompanying notes are an integral part of these condensed consolidated financial statements.

Table of Contents

Southern Copper Corporation

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY

(Unaudited)


	Three Months Ended				Six Months Ended
	June 30,				June 30,

	2024		2023		2024		2023

	(in millions)
TOTAL EQUITY, beginning of period	$	7,605.9	$	8,188.4	$	7,481.2	$	8,146.9
STOCKHOLDERS’ EQUITY, beginning of period		7,541.7		8,124.8		7,418.1		8,084.2
CAPITAL STOCK:
Balance at beginning and end of period:		8.8		8.8		8.8		8.8
ADDITIONAL PAID-IN CAPITAL:
Balance at beginning of period		3,541.4		3,497.7		3,532.8		3,489.7
Dividend paid in Common Stock		726.1		—		726.1		—
Other activity of the period		(10.6)		17.1		(2.0)		25.1
Balance at end of period		4,256.9		3,514.8		4,256.9		3,514.8
TREASURY STOCK:
Southern Copper common shares
Balance at beginning of the period		(2,766.6)		(2,766.8)		(2,766.7)		(2,766.9)
Dividend paid in Common Stock		199.5		—		199.5		—
Used for corporate purposes		0.2		—		0.2		0.1
Balance at end of period		(2,567.0)		(2,766.8)		(2,567.0)		(2,766.8)
Parent Company common shares
Balance at beginning of period		(390.6)		(348.3)		(382.3)		(340.7)
Other activity, including dividend, interest and foreign currency transaction effect		11.3		(16.7)

SOUTHERN COPPER CORP/ [SCCO] Filings
10-Q	[2024-08-02]
10-Q	[2024-04-30]
10-K	[2024-02-29]
10-Q	[2023-11-01]
10-Q	[2023-08-01]
10-Q	[2023-05-02]
10-K	[2023-02-28]
10-Q	[2022-10-31]
10-Q	[2022-07-27]
10-Q	[2022-05-05]
10-K	[2022-03-07]
10-Q	[2021-11-01]
10-Q	[2021-07-27]
10-Q	[2021-04-30]
10-K	[2021-02-26]
10-Q	[2020-10-28]
10-Q	[2020-07-30]
10-Q	[2020-05-04]
10-K	[2020-02-28]
10-Q	[2019-10-28]
10-Q	[2019-07-26]
10-Q	[2019-04-29]
10-K	[2019-03-01]
10-Q	[2018-10-31]
10-Q	[2018-07-30]
10-Q	[2018-05-02]
10-K	[2018-03-01]
10-Q	[2017-11-06]
10-Q	[2017-08-02]
10-Q	[2017-05-08]
10-K	[2017-03-01]
10-Q	[2016-11-08]
10-Q	[2016-08-01]
10-Q	[2016-05-02]
10-K	[2016-02-26]
10-Q	[2015-10-30]
10-Q	[2015-07-31]
10-Q	[2015-04-30]
10-K	[2015-03-02]
10-Q	[2014-10-31]
10-Q	[2014-08-05]
10-Q	[2014-05-06]
10-K	[2014-02-27]
10-Q	[2013-10-30]
10-Q	[2013-08-05]
10-Q	[2013-04-30]
10-K	[2013-02-28]
10-Q	[2012-10-25]
10-Q	[2012-08-03]
10-Q	[2012-05-02]
10-K	[2012-02-27]