VANCOUVER (miningweekly.com) – Base metals miner Southern Copper has reported a surprise loss of $287.5-million in the fourth quarter ended December 31, saying a $743.3-million one-time payment related to US tax reforms weighed on its financial results.
Excluding special items, the company would have reported earnings of $455.8-million, or $0.59 a share, which was on par with analyst earnings forecasts.
Based in Arizona and controlled by Grupo Mexico, Southern Copper said the adjusted fourth-quarter profit reflected a 165.2% improvement over the $171.9-million it earned in the comparable period of 2016.
Enacted in the fourth quarter, the new US income tax legislation resulted in foreign tax credit carryforwards that were generated before the new legislation by taxes paid in Peru and Mexico, where its operates, being cancelled.
Fourth-quarter sales totalled $1.86-billion – a 33.3% year-on-year improvement, as higher sales volumes for copper (5.7%) and zinc (19.8%) and higher prices for copper (29.7%), molybdenum (32.5%) and zinc (28.9%) boosted the top line.
Copper output rose 4.2% year-on-year in the fourth quarter to 237 307 t.
The company's NYSE-listed equity closed 3.56% lower at C$47.40 apiece on Friday.
Operating cash cost per pound of copper net of by-product revenues was $0.89/lb in the fourth quarter, compared with $0.96/lb in the comparable period of 2016.
Meanwhile, its majority owner Grupo Mexico – the fourth largest miner in Mexico, and which also has a transportation business – reported a fourth-quarter net profit of $131-million on Friday. Revenue for the quarter was $2.74-billion, up 33% year-on-year.