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    SCCO
    Earnings call· Dec 2025(Q4 FY25)

    SOUTHERN COPPER CORP/ SCCO

    Jan 28, 2026 Source

    Executive summary

    Southern Copper Q4 FY25 — Record Financials Despite Production Dip

    Southern Copper reported record net sales, adjusted EBITDA, and net income for FY25, driven by strong by-product production and improved metal prices. Despite a slight decrease in copper production in FY25 and an anticipated further decline in 2026 due to lower ore grades, the company is advancing major capital projects like Tia Maria, which is 24% complete and on track for 2027 production. Management remains focused on cost efficiency and sustainable growth, while actively engaging authorities to address challenges such as illegal mining at Los Chancas.

    Highlights

    5

    • Record net sales of $13.4 billion in FY25, a 17% increase over 2024.

    • Record adjusted EBITDA of $7.8 billion in FY25, up 22% YoY, with margin expanding to 58%.

    • Record net income of $4.3 billion in FY25, a 28% increase over 2024, with margin expanding to 32%.

    • Mined zinc production rose 36% year-on-year in FY25, bolstered by an additional 52,500 tons from the Buenavista zinc concentrator.

    • Mined silver production increased 15% year-on-year in FY25 to 24 million ounces.

    Concerns

    5

    • Copper production decreased 1.8% in FY25 to 956,270 tons, 1% lower than the 2025 plan.

    • Expected copper production decrease of 4.7% in 2026 to 911,400 tons, primarily due to lower ore grades at Peruvian operations.

    • Operating cash cost per pound of copper before by-product credits increased to $2.29/lb in Q4 FY25 (up $0.06 QoQ) and $2.17/lb in FY25 (up $0.04 YoY).

    • Illegal mining activity at the Los Chancas project area continues to prevent advancement, despite company efforts.

    • Molybdenum production is expected to decline in 2026 to 26,000 tons due to lower ore grades.

    Guidance & targets

    14
    CategoryTargetConfidence
    Copper market deficit
    320,000 tons
    high materiality
    High
    Copper production
    911,400 tons
    high materiality
    High
    Molybdenum production
    26,000 tons
    medium materiality
    High
    Silver production
    24 million ounces
    medium materiality
    High
    Zinc production
    165,500 tonnes
    medium materiality
    High
    Tia Maria first production
    30,000 tons
    high materiality
    High
    Tia Maria full capacity production
    120,000 tons per year
    high materiality
    High
    Tia Maria construction completion
    End of H1 2027
    high materiality
    High
    Tia Maria cash outflow
    $508 million
    medium materiality
    High
    Copper production
    Slightly north of 900,000 tons
    high materiality
    High
    Copper production
    970,000 tons
    high materiality
    High
    Copper production
    1,060,000 tons
    high materiality
    High
    Copper production
    1,060,000 tons
    high materiality
    High
    Operating cash cost per pound of copper (before by-products)
    Relatively flat
    medium materiality
    Medium

    Operational metrics

    33
    Net sales
    $13.4 billion+17% YoY
    FY25

    Record high for the company.

    Adjusted EBITDA
    $7.8 billion+22% YoY
    FY25

    Record high for the company.

    Adjusted EBITDA margin
    58%vs 56% in 2024
    FY25

    Expanded margin.

    Net income
    $4.3 billion+28% YoY
    FY25

    Record high for the company.

    Net income margin
    32%vs 30% in 2024
    FY25

    Expanded margin.

    Net sales
    $3.9 billion$1.1 billion higher than Q4 2024
    Q4 FY25

    Strong quarterly sales performance.

    Adjusted EBITDA
    $2.3 billion+53% QoQ
    Q4 FY25

    Strong quarterly EBITDA performance.

    Adjusted EBITDA margin
    60%vs 54% in Q4 2024
    Q4 FY25

    Expanded quarterly margin.

    Net income
    $1,038 million+65% QoQ
    Q4 FY25

    Strong quarterly net income performance.

    Net income margin
    34%vs 29% in Q4 2024
    Q4 FY25

    Expanded quarterly margin.

    Capital investments
    $1.3 billion+29% YoY
    FY25

    Total spend for the year.

    Capital investments as % of net income
    30%
    FY25

    Ratio of capital investments to net income.

    Cash dividend per share
    $1
    Q4 FY25

    Quarterly cash dividend declared.

    Stock dividend per share
    0.0085 shares
    Q4 FY25

    Stock dividend declared per share of common stock.

    Copper sales volume growth
    +3%QoQ
    Q4 FY25

    Increase in copper sales volume.

    Molybdenum sales volume growth
    +10%QoQ
    Q4 FY25

    Increase in molybdenum sales volume.

    Zinc sales volume growth
    +21%QoQ
    Q4 FY25

    Increase in zinc sales volume.

    Silver sales volume growth
    +11%QoQ
    Q4 FY25

    Increase in silver sales volume.

    Copper price (LME)
    $5.03+21% QoQ
    Q4 FY25

    Average London Metal Exchange copper price.

    Copper price (COMEX)
    $5.15+22% QoQ
    Q4 FY25

    Average COMEX copper price.

    Molybdenum price
    $22.75+5% QoQ
    Q4 FY25

    Average molybdenum price.

    Silver price
    $54.48+74% QoQ
    Q4 FY25

    Average silver price.

    Zinc price
    $1.44+4.3% QoQ
    Q4 FY25

    Average zinc price.

    Copper inventories (global)
    14 days
    As of Jan '26

    Worldwide inventories (LME, COMEX, Shanghai, bonded warehouses) as days of global demand.

    Cost in Mexican pesos
    39%
    Current

    Portion of total operating costs denominated in Mexican pesos.

    Cost in Peruvian sols
    10%
    Current

    Portion of total operating costs denominated in Peruvian sols.

    Cost in US dollars
    51%
    Current

    Portion of total operating costs denominated in US dollars.

    Tia Maria construction jobs created
    3,589
    Current

    Jobs created during the construction phase of the Tia Maria project.

    Tia Maria direct jobs (operations)
    764
    Upon operation

    Direct jobs expected once Tia Maria operations begin.

    Tia Maria indirect jobs (operations)
    nearly 6,000
    Upon operation

    Indirect jobs expected once Tia Maria operations begin.

    Public Works for Taxes investment (cumulative)
    $400 million
    Cumulative

    Total investment through the Public Works for Taxes mechanism in Peru.

    Public Works for Taxes current investment
    $28 million
    Current

    Current investment in 4 projects benefiting over 5,000 people.

    Health campaigns beneficiaries
    5,000 residents
    2025

    Number of residents benefiting from health campaigns near mining operations and projects in Peruvian regions.

    Industry KPIs

    7
    MetricValueDetails
    SafetyAccredited
    Unit cash cost$2.29per pound
    By product credits$920 millionUSD
    Reserve life new supplyFinding new reserves
    Growth project CAPEX first production$1.8 billionUSD
    Ore grade recovery drilling by depositBetter ore grades and recoveries
    Production sales volume by metal and by mine242,172tons

    Capital programs

    4
    Current Capital Investment ProgramunderwayExceeds $20.5 billion
    Period spend: $1.3 billion
    Start: This decade

    Company's overall capital investment program for the current decade, including projects in Peru and Mexico. $1.3 billion was spent in 2025, a 29% increase YoY, representing 30% of net income.

    Tia Maria Projectunder construction$1.8 billion
    Period spend: $508 million
    Spent to date: 24% complete; $800 million committed

    Benefit: 120,000 tons per year of copper

    Located in Arequipa, Peru. 24% complete as of end-2025. $800 million committed to date. Expected to generate $20.2 billion in exports and $4.6 billion in taxes/royalties over its first 20 years of operation. $508 million cash outflow forecasted for 2026 due to better payment terms. First production of 30,000 tons expected in H2 2027, reaching full capacity of 120,000 tons/year from 2028.

    Los Chancas Mining Projectpaused

    Located in Apurimac, Peru. Project advancement is currently prevented by the presence of illegal miners within the project area. The company is taking actions with relevant authorities to regain control.

    Michiquillay Projectunder review$2.5 billion

    Benefit: 225,000 tons of copper per year

    Located in Cajamarca, Peru. World-class greenfield mining project. Comprehensive review of geological information for mineral resource estimation has been audited. The company intends to use this information to estimate mineral reserves and develop the corresponding mine plan.

    Risks & headwinds

    4
    Lower ore grades at Peruvian operations2026 (Toquepala temporary, Cuajone structural)

    Expected 4.7% decrease in copper production in 2026 to 911,400 tons.

    Mitigation: Considering Cuajone expansion; implementing cost control initiatives and reducing maintenance/contractor services.

    Illegal mining at Los Chancas projectOngoing

    Prevents project advancement.

    Mitigation: Company is taking actions with relevant authorities to regain control of the project area.

    Currency appreciation (Mexican peso, Peruvian sol) impacting operating costsCurrent

    Mexican peso costs are 39% of total, Peruvian sol costs are 10% of total. Stated as a primary driver of cost increases.

    Mitigation: Cost control initiatives; strong by-product production provides credits.

    Molybdenum production decline2026

    Expected 26,000 tons in 2026, down from 31,200 tons in 2025.

    Mitigation: Not explicitly stated, but implies focus on other by-products and optimizing overall value.

    What to watch in Q1 FY26

    5

    Tia Maria construction progress

    Next quarter (Q1 FY26) and H1 2027
    Current24% complete; $800M committed; $508M cash outflow forecast for 2026
    TargetContinued progress towards mid-2027 construction completion and H2 2027 first production

    Why it matters

    Key growth project for future copper production and revenue, critical for long-term targets.

    Construction should be finished by the end of the first half of 2027, and we are expecting to produce about 30,000 tons in the second half of 2027 and then in 2028 and on at full speed of 120,000 tons per year.

    Q&A highlights

    6

    Seeking updated cost guidance, particularly regarding currency inflation in local currencies (peso, sol) vs. USD, and mitigation strategies.

    Management stated that the worst of inflation is over, and current costs are more affected by currency appreciation (peso, sol) than specific inflation. They expect operating costs per pound to be relatively flat for 2026, with strong by-product production helping credits.

    “Our costs are currently being more affected by currency appreciation for the peso and the Peruvian sol than specific inflation from Mexico or Peru.”

    asked by Timna Tanners · answered by Raul Jacob

    2 min read5 chapters

    Detailed Narrative

    01

    Record Financial Performance

    Southern Copper achieved record net sales of $13.4 billion, adjusted EBITDA of $7.8 billion, and net income of $4.3 billion in FY25, representing 17%, 22%, and 28% increases respectively over FY24. This strong performance was primarily driven by higher by-product production and improved metal prices across all products, leading to expanded EBITDA and net income margins to 58% and 32% respectively for the full year.

    02

    Production Overview and Outlook

    Copper production decreased 1.8% in FY25 to 956,270 tons, falling slightly short of the 2025 plan. A further decrease of 4.7% to 911,400 tons is expected in 2026, mainly due to lower ore grades at Peruvian operations. By-product production saw significant increases in FY25, with zinc up 36% and silver up 15%, while molybdenum increased 7.4%. For 2026, molybdenum and silver production are expected to be relatively flat or slightly down, with zinc production forecasted at 165,500 tons.

    03

    Operating Costs and By-product Contribution

    Operating cash cost per pound of copper before by-product credits increased to $2.29 in Q4 FY25 and $2.17 for the full year 2025, primarily due to higher production costs, administrative expenses, and lower premiums. However, net cash cost after by-product credits significantly decreased to $0.58/lb in FY25, a $0.31 reduction from FY24, driven by a $0.34 increase in by-product revenue credits, which totaled $920 million or $1.77/lb in Q4 FY25.

    04

    Tia Maria Project Advancement

    The Tia Maria project in Peru is 24% complete as of end-2025, with an estimated capital budget of $1.8 billion and $800 million committed to date. The project is on track for operations to begin in 2027, providing 764 direct and nearly 6,000 indirect jobs, and is expected to produce 30,000 tons in H2 2027, reaching full capacity of 120,000 tons per year from 2028. Construction is expected to finish by mid-2027, with $508 million in cash outflow forecasted for 2026 due to better payment terms.

    05

    Other Key Projects and ESG Initiatives

    The Los Chancas project continues to be hampered by illegal mining, with the company engaging authorities to regain control. The Michiquillay project, a world-class greenfield copper project with an estimated $2.5 billion investment, is undergoing geological information review for mineral resource estimation. Southern Copper received The Copper Mark accreditation for its Buenavista, Toquepala, and Cuajone mines, recognizing compliance with global tailings management standards, and its La Caridad unit received a safety award. The company also highlighted significant community investments through Public Works for Taxes in Peru, totaling $400 million cumulatively.

    AI-generated summary of the company’s earnings call. Not investment advice.