Southern Copper Corporation

Second-quarter 2026 sales were $4.3 billion, up $1.2 billion or 41% year over year. Adjusted EBITDA was a record $2.856 billion, up 60% from $1.791 billion, with adjusted EBITDA margin at 67% versus 59% a year ago. Net income was a record $1.670 billion, up 72% from $973 million, and net income margin was 39% versus 32%. Year-to-date adjusted EBITDA was $5.569 billion, up 58%, and cash flow from operating activities for 6M26 was $3.683 billion, up 117% from $1.698 billion. Copper production in the quarter was 230,662 tons, down 3.5% year over year, with the decline tied mainly to lower ore grades and recoveries in Peru. Full-year 2026 guidance was increased to 917,000 tons of copper, 27,900 tons of molybdenum, 24 million ounces of silver and 163,900 tons of zinc. Management also said 2027 copper production is expected to be about the same as 2026 for now, rising to about 970,000 tons in 2028 and 1,060,000 tons in 2029 as Tia Maria and other projects contribute.

Leonardo Contreras framed the quarter as an exceptional period of operating performance, saying the company delivered record sales, adjusted EBITDA and net income. His tone was constructive on the long-term growth pipeline, emphasizing organic expansion through projects in Peru and Mexico and saying SCC aims to exceed 1.6 million tons of copper by 2033-2034. He also pointed to a generally positive backdrop in Peru if the incoming government improves security and stability for mining investment.

Raul Jacob highlighted the strength in pricing and margins, noting LME copper averaged $6.04 per pound versus $4.32 a year earlier, molybdenum averaged $29.44 versus $20.57, and silver averaged $73.49 per ounce versus $33.62. He said operating cash cost before by-product credits was $2.29 per pound, down $0.02 sequentially, while cash cost including by-product credits was $0.05 per pound, versus minus $0.11 in Q1. He also noted total by-product credits of $1.106 billion, or $2.24 per pound, and said the company issued $1.25 billion of 10-year senior notes at 5.35% to help fund Tia Maria and related capital needs. Capital investments were $423 million in the quarter and $865 million in the first half, and the broader investment program now exceeds $20.5 billion.

Analysts focused on the lower copper output versus last year, the pace of grades at Toquepala and Cuajone, and whether 2026 guidance could still be beaten. Management said the shortfall was mainly due to ore grades at Cuajone, with about 35,000 tons of lower copper production tied to that mine, and said the Mexican operations partly offset the Peru weakness. Questions also centered on Tia Maria execution and the desalination plant; management said purchase orders are being placed, including for the desal plant, and that no delay is currently expected. On El Pilar, management said the water license has been renewed and early works are set to begin in September. Analysts also asked about Peru’s new administration and potential mining-policy changes; management said it expects a more stable security and institutional environment, but declined to comment on specific proposals like direct distribution of mining canon until details are clear.