EBITDA: $2.7 billion in the third quarter.
Operating cash flow: $1.9 billion in the third quarter.
Copper sales volume: Exceeded expectations for the quarter.
Gold sales volume: Exceeded expectations for the quarter.
Unit net cash cost: $1.58 per pound in 2024, below previous expectations of $1.63 per pound.
Cerro Verde Stock Purchase: Purchased 5.3 million shares for $210 million, increasing ownership to 55%.
Copper price range (LME): $3.91 to $4.47 per pound during the quarter.
Capital expenditures: Projected to be $3.6 billion in 2024 and $4.2 billion in 2025.
Expected annual EBITDA: $11 billion at $4 copper, $15 billion at $5 copper.
Projected operating cash flow: more than $7 billion at $4 copper and more than $10.5 billion at $5 copper.
Release date: October 22, 2024
For a complete record of financial statements, see Complete Record of Financial Statements.
Freeport-McMoRan, Inc. (NYSE:FCX) reported strong financial results with EBITDA of $2.7 billion and operating cash flow of $1.9 billion in the third quarter.
Sales volumes of both copper and gold exceeded plans, and unit cash cost performance remained strong.
The company increased its ownership of the Cerro Verde assets from 53.6% to 55%, increasing its stake in high-quality assets.
Freeport-McMoRan (NYSE:FCX) is driving innovative leaching technology, increasing copper production by 70% year-over-year.
The company is well positioned for long-term growth due to its strong reserves and resource position and continued efforts to expand low-cost copper volumes in the Americas.
A fire incident at a new smelter in Indonesia has caused a temporary halt to start-up activities, potentially impacting concentrate exports.
The company faces the challenge of high cash prices in North America, currently exceeding $3 per pound.
There is uncertainty regarding the schedule for repairs and restart of operations at the Indonesian smelter.
Freeport-McMoRan Inc. (NYSE:FCX) is subject to a cash restriction policy in Indonesia, which requires it to hold 30% of its export proceeds in local banks for 90 days.
The company operates lower grade products in North America, which impacts cost efficiency and requires continued efforts to improve asset productivity.
Q: Can you tell me more about insurance coverage and potential business interruption for a smelter fire in Indonesia? A: Kathleen Quirk, President and CEO I explained that it includes expenses, but not business interruption coverage. The company is focused on completing repairs quickly and is in discussions with the Indonesian government to ensure continued export of concentrate.
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Q: Regarding the $1 billion cash limit in Indonesia, will this policy continue even after the smelter starts operating? A: Kathleen Quirk said the cash restriction policy applies to all Indonesian exports and will continue unless regulations change. Your cash will be temporarily held for 90 days and you will earn income while it is there.
Q: What is the estimated timeline for repairs to Indonesia’s smelter and what is the government’s response? A: Kathleen Quirk said the repair schedule is still being evaluated, but the government is cooperative. Ta. The company is working to speed up repairs and ensure exports continue, as the government understands the economic benefits of continuation.
Q: Are there any plans to increase Freeport’s Cerro Verde stake and what is its share buyback strategy? A: Kathleen Quirk said that increasing Cerro Verde’s stake is opportunistic. The company said it is open to further acquisitions if the opportunity arises. Freeport will continue to repurchase its own shares as part of its cash allocation framework, while balancing shareholder returns and organic growth.
Q: How does Freeport view large-scale M&A opportunities in this space? A: Richard Adkerson, chairman of the board, said that while M&A is not fundamental to Freeport’s strategy, the company is responding to opportunities. He said he was prepared to do so. While we remain focused on organic growth, we monitor market activity and potential opportunities.
For a complete record of financial statements, see Complete Record of Financial Statements.
This article first appeared on GuruFocus.
