JPM-Southern Copper Corporation 2Q25 Results：EBITDA Beats JPMe and Consensus；Positive-20250729

Our Analysis: Prices and costs support beat to JPMe; positive. SCCO reportedan EBITDA of $1.8 billion, surpassing our estimates by 15.0% and the Bloombergconsensus by 3.0%. This outperformance was primarily driven by two factors: (a)average prices were 12.6% higher than JPMe's projections, and (b) costs were 1.4%lower than anticipated. The company emphasized that cash costs per pound ofcopper, net of by-product revenue credits, were $0.63/lb, marking a decrease ofapproximately 17% year-over-year. This was mainly due to a 6% increase in by-product revenue credits. This favorable combination more than compensated forthe decline in copper sales during the quarter, which fell by 6.7% quarter-over-quarter and 8.1% compared with JPMe's expectations. SCCO noted that thedecrease in copper production, down 1.4% quarter-over-quarter, was primarily dueto reduced output at Buenavista (-2.9%) and La Caridad (-1.7%). Production at thePeruvian operations was also slightly lower quarter-over-quarter. Regarding theTia Maria project, the company reported that as of June 30th, progress continuesin job creation, with early construction phase advancements in access roads andplatforms reaching 90% completion. To date, 59 km of live fencing has beeninstalled to delineate the property. In our calculations, free cash flow (FCF) waspositive at $284 million, implying an annualized yield of 1.5%. Net debt increasedby $783 million, reaching $3.4 billion, influenced by a dividend payment of $557million and debt repayment of $500 million. Leverage increased to 0.51x from0.46x in the first quarter of 2025. Overall, we anticipate a positive market reactionto these reported figures.

Conference call details: Wednesday, July 30 th , at 11AM ET. Registration linkhere.