Southern Copper: record EBITDA and negative net debt, but the valuation is already above its 3-year average

22 июля Southern Copper раскрыла результаты за второй квартал 2026 года: выручка выросла на 40,6% до 4 289,0 млн долл., скорректированная EBITDA – на 59,3% до 2 856,0 млн долл., чистая прибыль – на 71,5% до 1 674,6 млн долл.. Компания продолжает пожинать плоды высоких цен на медь и серебро, а чистый долг впервые стал отрицательным. Однако на фоне сильных результатов акция выглядит дорогой: по модели портала потенциал снижения составляет -22%, что делает бумагу непривлекательной на текущем уровне.

Key takeaways

— Выручка выросла на 40,6% благодаря ценам на медь, серебро и молибден, несмотря на снижение объёмов продаж меди на 1,5%

— EBITDA-маржа достигла 66,6% против 58,8% годом ранее – операционный рычаг сработал на фоне роста цен

— Чистая прибыль выросла на 71,5%, но почти вся она остаётся в компании из-за масштабной инвестпрограммы

— Чистый долг стал отрицательным: -370,4 млн долл. – компания накопила больше денег, чем долга

— Дивиденды за квартал выросли до 3,23 долл. на акцию, но доходность всего 1,9% на фоне высокой оценки

— Капзатраты выросли на 79,4% до 422,8 млн долл. – компания ускоряет стройку в Перу и Мексике

— Оценка: EV/EBITDA 18,0 против среднего 14,1 за три года – рынок уже заложил рекордные цены на металлы

Attractiveness

Key figures, USD bn

Revenue grew 40.6% thanks to copper, silver and molybdenum prices, despite a 1.5% decline in copper sales volumes

In the second quarter of 2026, Southern Copper's revenue reached $4,289.0 million – a new quarterly record. The 40.6% growth year-on-year was driven primarily by prices: LME copper rose 39.8%, silver 118.6%, molybdenum 43.1%, and zinc 30.8%. Copper sales volumes fell 1.5%, and molybdenum sales dropped 13.1%.

The company attributes the copper volume decline to lower production at its Peruvian mines due to lower ore grades. In the first half, copper production fell 3.8% to 461,206 tonnes. Nevertheless, the price factor more than offset the weak volume dynamics.

EBITDA margin reached 66.6% versus 58.8% a year earlier – operating leverage worked amid higher prices

Adjusted EBITDA in the second quarter grew 59.3% to $2,856.0 million, and the margin rose to 66.6% from 58.8% a year earlier. The margin expansion was driven by cost of sales rising only 14.7% while revenue grew 40.6%.

The company also reported record-low cash costs: operating cash cost per pound of copper, net of by-product credits, was $0.05 versus $0.63 a year earlier. This reflects higher by-product revenue credits, especially from silver and molybdenum.

Net profit grew 71.5%, but almost all of it stays in the company due to a massive investment program

Net profit for the quarter was $1,674.6 million, up 71.5% year-on-year. Net margin reached 39.0% versus 32.0% in Q2 2025. Growth was driven by operating leverage and high metal prices.

However, a significant portion of profit is directed to capital investments: in Q2, capex was $422.8 million, equivalent to 25.4% of net profit. The company is executing a large-scale development program, including the Tía María, Los Chancas, and Michiquillay projects in Peru, and El Pilar in Mexico.

Net debt turned negative: -$370.4 million – the company holds more cash than debt

At the end of Q2 2026, Southern Copper's net debt stood at -$370.4 million – for the first time in the period under review, the company holds more cash and short-term investments than total debt. A year earlier, net debt was $3,438.6 million, and at the end of Q1 2026 it was $2,052.2 million.

Such a sharp improvement is due to strong operating cash flow: in the quarter it reached $1,988.5 million, more than double the year-ago level. The company also issued $1.25 billion in bonds at 5.35% annual interest, but these funds will be used to finance the Tía María project, not to repay debt.

Quarterly dividend rose to $3.23 per share, but the yield is only 1.9% amid a high valuation

The Board of Directors on July 16 approved a quarterly dividend of $1.10 per share in cash and 0.0120 shares per share as a stock dividend. Including the value of the stock component (based on a price of $177.32), the total dividend for the quarter is estimated at $3.23 per share.

Over the last 12 months, the dividend yield was 1.86% – modest, given that the company directs significant funds to its investment program. For comparison, the US key rate is around 4-5%, so shareholders effectively receive a yield below the risk-free rate. However, the company has historically increased dividends as profits grow, and if copper prices remain high, payouts could continue to rise.

Capex rose 79.4% to $422.8 million – the company is accelerating construction in Peru and Mexico

Capital investments in Q2 were $422.8 million, up 79.4% year-on-year. In the first half, capex reached $864.7 million – a 56.2% increase. The company is executing projects with a combined investment of over $20.5 billion this decade.

The key project is Tía María in Peru, which is 42% complete. The company expects to start production in H2 2027. The Los Chancas and Michiquillay projects are also advancing but at earlier stages. In Mexico, the company is preparing to start construction of the El Pilar project in Q1 2027.

Valuation: EV/EBITDA of 18.0 versus a 3-year average of 14.1 – the market has already priced in record metal prices

The current EV/EBITDA multiple is 18.0 – notably above the 3-year average of 14.1. P/E LTM is 31.4. Such a valuation implies that the market expects high copper and silver prices to persist in the long term.

According to the portal's model, which re-prices EBITDA at current metal prices and applies a target EV/EBITDA, the downside potential for the share is -22%. In other words, even with record profitability and negative net debt, the current price already embeds an overly optimistic scenario.

Valuation on the latest reported figures

Bottom line

Southern Copper delivered a strong quarter: record revenue, EBITDA and net profit, and net debt turned negative. However, these results are largely driven by unprecedentedly high metal prices, not by volume growth, which is declining. The company is directing significant funds to its investment program, limiting dividend yield to 1.9%. Meanwhile, the share trades at a premium to its own history, and the portal's model indicates a 22% downside. The verdict is unattractive: the current price already reflects the persistence of record market conditions, and any setback in metal prices or project delays could trigger a correction.