Southern Copper Ready to Expand with Solid Growth Projects, Despite High Costs
June 26, 2023
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Southern Copper ($NYSE:SCCO) Corporation (NYSE: SCCO) is one of the world’s largest copper producers, with its operations primarily concentrated in Peru and Mexico. It has the potential to expand its copper reserves and various development projects which could bring significant growth opportunities.
However, high costs may limit their growth, as inflationary pressures could reduce their profit margins. The company has been making efforts to reduce costs by introducing new technologies and optimizing its production process. Looking ahead, Southern Copper is ready to expand its operations with various solid projects, such as development of a new copper mine in Peru and an expansion of their existing operation in Mexico. Southern Copper’s management team is optimistic about their long-term growth prospects and is confident that their investments will pay off in the future. Nevertheless, they face the challenge of managing costs as inflationary pressures may reduce their profit margins. The company has taken steps to mitigate this risk by exploring new cost-saving measures and aiming for higher efficiency in their production process. Overall, Southern Copper is well-positioned to benefit from growth opportunities, with various projects that are ready to expand operations. However, high costs could limit their growth, as inflationary pressures may reduce their profit margins. With cost-saving measures in place, Southern Copper is looking to make the most of its growth potential.
Share Price
On Tuesday of this week, SCC stock opened at $73.5 and closed at $73.2, down by 1.7% from its prior closing price of $74.4. The company is confident that these projects will result in solid growth for the company in the medium to long term. While these projects are expensive, SCC believes that the returns far outweigh the costs, and that’s why they’re moving forward with them. SCC is also well-positioned to take advantage of the current market conditions, as the price of copper on the world market is relatively high right now.
This could result in further growth for SCC, which would be beneficial to shareholders and other stakeholders. They are confident that their growth projects will result in solid returns in the medium to long term, and that they can take advantage of the current market conditions to further increase their profits. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Southern Copper. More…
| Total Revenues | Net Income | Net Margin |
| 10.08k | 2.67k | 26.5% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Southern Copper. More…
| Operations | Investing | Financing |
| 3.17k | -712.3 | -3.01k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Southern Copper. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 17.32k | 9.13k | 10.51 |
Key Ratios Snapshot
Some of the financial key ratios for Southern Copper are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 11.6% | 18.5% | 44.5% |
| FCF Margin | ROE | ROA |
| 21.7% | 34.6% | 16.2% |
Analysis
GoodWhale conducted an analysis on Southern Copper‘s wellbeing, providing a comprehensive overview of their financial performance. Our star chart reveals that Southern Copper has a high health score of 10/10 with regard to their cashflows and debt, indicating their capability to pay off debt and fund future operations. Additionally, Southern Copper is strong in dividend, profitability, and medium in asset, growth. We classified them as a ‘rhino’, i.e. a company that has achieved moderate revenue or earnings growth. We believe that value investors who are looking for stable and consistent returns may find Southern Copper to be an attractive company to invest in. More…
Peers
The global copper industry is highly competitive, with a large number of companies vying for market share. Southern Copper Corp is one of the largest copper producers in the world, and competes against China Nonferrous Mining Corp Ltd, Hindustan Copper Ltd, and Jiangxi Copper Co Ltd, among others. The company has a long history dating back to 1902, and has a strong position in the market. Southern Copper Corp is a vertically integrated company, meaning it is involved in all aspects of the copper mining process, from exploration and development to mining, smelting, and refining. The company has a diversified portfolio of assets and operations, and is one of the lowest-cost copper producers in the world. Southern Copper Corp is well-positioned to compete in the global copper industry.
– China Nonferrous Mining Corp Ltd ($SEHK:01258)
The company’s market cap is 11.67B as of 2022, a Return on Equity of 29.54%. The company is engaged in the business of nonferrous metals mining and operates a number of mines in China. It is also engaged in the smelting and refining of nonferrous metals. The company’s products include copper, aluminum, lead, zinc, nickel, tin, and precious metals.
– Hindustan Copper Ltd ($BSE:513599)
Hindustan Copper Ltd is an Indian copper mining company with a market cap of 103.42B as of 2022. The company has a Return on Equity of 13.71%. Hindustan Copper Ltd is engaged in the business of copper mining, smelting, and refining. The company has mines in Jharkhand and Rajasthan, and a plant in Gujarat. The company produces copper cathodes, copper rods, and copper wire. Hindustan Copper Ltd also produces gold and silver.
– Jiangxi Copper Co Ltd ($SHSE:600362)
Jiangxi Copper Co Ltd is a Chinese company that produces and supplies copper. The company has a market cap of 44.09B as of 2022. The company’s Return on Equity is 8.5%. Jiangxi Copper Co Ltd produces copper cathodes, copper rods, and copper wire. The company also produces gold, silver, and other metals. Jiangxi Copper Co Ltd is headquartered in Jiangxi Province, China.
Summary
Southern Copper is an attractive investment opportunity due to its strong copper reserves and planned growth projects. Investors can anticipate a steady return on their investment should they choose to invest in the company. The company has the potential for higher returns as inflationary pressures may drive up the price of copper, which would increase Southern Copper’s margins. Analysts suggest that investing in Southern Copper is a safe bet as the company is well-positioned to benefit from increased demand for copper over the long-term.
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