Sociedad Minera Cerro Verde (CVERDEC1) Q2 2024 earnings summary

Executive summary

• Net income for Q2 2024 reached $316.3M, up from $59.5M in Q2 2023, driven by higher copper and molybdenum prices, partially offset by lower sales volumes and non-recurring labor costs.

• Revenue for Q2 2024 was $1,257.4M, a $277.1M increase year-over-year, mainly due to higher realized copper prices ($4.74/lb vs $3.52/lb) and molybdenum prices ($21.17/lb vs $16.14/lb).

• Cost of sales increased by $49M, mainly due to a $65.1M one-time labor agreement, but cost of sales as a percentage of revenue improved to 56% from 67% year-over-year.

• Production of copper concentrates and cathodes was 242.2M lbs in Q2 2024, down from 256.7M lbs in Q2 2023.

Financial highlights

• Net income for H1 2024 was $498.9M, up from $388.0M in H1 2023.

• Basic and diluted EPS for H1 2024 was $1.425, compared to $1.108 in H1 2023.

• Operating cash flow for H1 2024 was $769.5M, compared to $905.9M in H1 2023.

• Investments in property, plant, and equipment totaled $151.9M in H1 2024, up from $140.4M in H1 2023.

• Cash and equivalents at June 30, 2024 were $820.7M, up from $509.6M at year-end 2023.

Outlook and guidance

• Management expects potential additional labor costs as negotiations with the second union are pending before the current agreement expires on August 31, 2024.

• Market volatility in copper prices and exchange rates may impact future results.