Southern Copper mining sales were US$2.82 billion in 4Q22

By Southern Copper Corporation

February 2, 2023

This is a machine translation of the original press release issued in Spanish

Net sales in 4Q22 were $2,820.3 million, in line with 4Q21 net sales. Sales volumes increased for copper (+2.1%), silver (+6.4%) and zinc (+38.2%) and decreased for molybdenum (-15.7%). While the price of molybdenum rose 14.2% during the quarter, the prices of copper (-17.5%), silver (-11.1%), and zinc (-9.0%) decreased, offsetting the positive impact of higher sales volumes.

In 2022, net sales decreased 8.1% compared to the 2021 figure. This result was driven by a decrease in the sales volumes of copper (-6.5%), silver (-1.9%) and molybdenum (-13.4%) . Zinc sales volume increased 10.5% and its price rose 16.2%. Molybdenum prices also increased 20% compared to 2021, while copper (-5.4%) and silver (-13.6%) prices decreased.

Net income in 4Q22 was $902.4 million, which represented an increase of 8.3% compared to the $833.0 million recorded in 4Q21. Net profit margin in 4Q22 was 32.0%, versus 29.5% in 4Q21. Net profit for 2022 was $2,638.5 million, 22.3% lower than in 2021. Net profit margin in 2022 was 26.3%, versus 31.1% in 2021.

Adjusted EBITDA for 4Q22 was $1,647.5 million, which represented a 4.6% decrease compared to the $1,726.5 million registered in 4Q21. Adjusted EBITDA margin in 4Q22 was 58.4% versus 61.1% in 4Q21.

Adjusted EBITDA in 2022 was $5,365.3 million; 21.7% below the 2021 figure. Adjusted EBITDA margin in 2022 was 53.4% vs 62.7% in 2021.

Cash flow from operating activities in 2022 was $2,802.5 million, which represented a 34.7% decrease over the $4,292.4 million published in 2021.

Copper production posted a 1.6% increase in 4Q22 on a quarter-over-quarter basis. Higher production at our Peruvian mines was primarily attributable to an uptick in ore recoveries. Production from our Mexican mines was in line with 2021 production.

Overall copper production in 2022 decreased 6.6% YoY to 894,703 tons. The annual drop was attributable to the strike at Cuajone (22,208 tons) and a temporary drop in mineral grades (38,106 tons).

Quarter-over-quarter production: Mined silver production increased 9.6% in 4Q22, driven by higher production at our IMMSA, Buenavista and Cuajone operations. Molybdenum production decreased (-15.6)% in 4Q22 compared to 4Q21, which was mainly due to lower production at our Toquepala mine. Mined zinc production decreased 7.4% this quarter, mainly due to a drop in production at our Charcas unit.

Annual production of by-products: Molybdenum production was 26,240 tons in 2022, which was 13.3% lower than the figure in 2021. This drop was due to a reduction in production at our Toquepala mine, which is explained by lower grades of mineral. Mined zinc production fell 10.4% YoY due to lower production at the Charcas and Santa Barbara mines. Mined silver production fell 2.1% in 2022, reflecting decreased production at our Peruvian operations and at the La Caridad mine. This reduction was partially offset by an increase in production at our Buenavista and IMMSA mines.

Operating cash cost per pound of copper for 4Q22, net of by-product credit, was $0.45, which represented a 41.6% decrease compared to $0.76 reported in 4Q21. The aforementioned result was mainly attributable to the increase in by-product credits, mainly molybdenum.

Operating cash cost per pound of copper for 2022, including by-product credit, was $0.78, which represented an increase of 16.5% compared to $0.67 reported in 2021. This result was primarily due to increased cost of production and higher unit cost effect generated by a 6.6% decrease in pounds of copper produced. This result was partially offset by an increase in by-product credits.

In 2022, we spent $948.5 million on capital investments, which reflected an increase of 6.3% YoY and represented 35.9% of net income in 2022.

Dividends: On January 26, 2023, the Board of Directors authorized a dividend of $1.0 per share, payable on March 1, 2023, to shareholders of record as of the close of business on February 14, 2023.