Southern Copper’s Quarterly Net Falls on Higher Sales CostsAlex Emery
Southern Copper Corp., the largest producer of the metal in Peru and Mexico, said fourth-quarter profit fell as rising costs offset higher metals prices.
Net income slipped 1 percent to $531.8 million, or 63 cents a share, from $537 million, or 63 cents, a year earlier, the Phoenix-based company said in a statement today. Profit exceeded the 60-cent average of three analysts’ estimates compiled by Bloomberg.
Sales fell 1.1 percent to $1.65 billion. Copper futures in New York averaged 5.6 percent higher in the quarter than a year ago, while silver prices gained 2.4 percent. The cost of sales rose 8.5 percent after the company cut third-party copper concentrate purchases by 85 percent.
“It was a pretty flat quarter, with a slight gain in prices,” Bruno Kresevic, an analyst at NCF Inversiones SA who doesn’t own the shares or rate them, said in a phone interview from Lima. “Rising costs are an issue.”
Quarterly copper production from the company’s own mines climbed 1.5 percent to 163,799 metric tons, while zinc and silver output increased by 11.4 percent and 0.4 percent, respectively. Molybdenum output fell 9.6 percent.
The company, which is 81-percent owned by Grupo Mexico SAB, plans to increase copper production capacity 84 percent to 1.18 million tons by 2017. Copper for March delivery fell 0.5 percent to $3.732 a pound today on the Comex in New York.
The report was released after the close of regular trading on U.S. markets. Southern Copper rose 0.5 percent to $39.39 at the close in New York. The stock has gained 15 percent in the past year.
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