Apr 23, 2024 (MarketLine via COMTEX) --
Freeport-McMoRan has posted first-quarter 2024 net income attributable to common stock of $473 million, $0.32 per share, and adjusted net income attributable to common stock of $474 million, $0.32 per share.
For additional information, refer to the supplemental schedule, “Adjusted Net Income,”
• Strong first-quarter 2024 operating performance: ? Copper sales volumes exceeded January 2024 estimate and first-quarter 2023 ? Unit net cash costs below January 2024 estimate and first-quarter 2023
• Indonesia smelter projects nearing completion with start-up activities expected in second-quarter 2024
• Solid financial position
• Favorable market fundamentals
? Net income attributable to common stock in first-quarter 2024 totaled $473 million, $0.32 per share, and adjusted net income attributable to common stock totaled $474 million, $0.32 per share.
? Consolidated production totaled 1.1 billion pounds of copper, 549 thousand ounces of gold and 18 million pounds of molybdenum in first-quarter 2024.
? Consolidated sales totaled 1.1 billion pounds of copper, 568 thousand ounces of gold and 20 million pounds of molybdenum in first-quarter 2024.
? Consolidated sales are expected to approximate 4.15 billion pounds of copper, 2.0 million ounces of gold and 84 million pounds of molybdenum for the year 2024, including 1.0 billion pounds of copper, 500 thousand ounces of gold and 21 million pounds of molybdenum in second-quarter 2024.
? Average realized prices were $3.94 per pound for copper, $2,145 per ounce for gold and $20.38 per pound for molybdenum in first-quarter 2024.
? Average unit net cash costs were $1.51 per pound of copper in first-quarter 2024. Unit net cash costs are expected to average $1.57 per pound of copper for the year 2024.
? Operating cash flows totaled $1.9 billion, net of $0.1 billion of working capital and other uses, in firstquarter 2024. Operating cash flows are expected to approximate $7.4 billion, net of $0.2 billion of working capital and other uses, for the year 2024, based on achievement of current sales volume and cost estimates, and assuming average prices of $4.25 per pound for copper, $2,300 per ounce for gold and $20.00 per pound for molybdenum for the remainder of 2024.
? Capital expenditures totaled $1.3 billion, including $0.4 billion for major mining projects and $0.5 billion for the Indonesia smelter projects, in first-quarter 2024. Capital expenditures are expected to approximate $4.6 billion, including $2.3 billion for major mining projects and $1.0 billion for the Indonesia smelter projects, for the year 2024.
? At March 31, 2024, consolidated debt totaled $9.4 billion and consolidated cash and cash equivalents totaled $5.2 billion, $6.1 billion including $0.9 billion of current restricted cash associated with a portion of PT Freeport Indonesia’s (PT-FI) export proceeds required to be temporarily deposited in Indonesia banks. Net debt totaled $0.3 billion, excluding $3.0 billion of debt for the Indonesia smelter projects. Refer to the supplemental schedule, “Net Debt,” on page VIII.
? Kathleen L. Quirk, President, will transition to President and Chief Executive Officer (CEO) effective as of the annual meeting of shareholders on June 11, 2024. Richard C. Adkerson, who has served as CEO since 2003, will continue as Chairman of the Board of Directors.
Richard C. Adkerson, Chairman and CEO, said, “During my 20-year tenure as CEO, our team has established Freeport as a global leader in the metals industry, with a strategic focus of being Foremost in Copper. We have a solid foundation for the future, with a high-quality portfolio of large-scale producing assets, an attractive pipeline of future growth options, an exceptionally talented and committed team and a high-performance culture. My passion for Freeport and our future prospects has never been stronger.
As Chairman, I look forward to supporting Kathleen in the upcoming CEO transition and to contributing to achieving our business objectives on strategic matters of significance.” Kathleen L. Quirk, President, said, “Our first-quarter results reflect strong execution of our operating plans, consistent with our long-standing focus on operational execution. As I prepare to become CEO, my priorities are focused on the drivers that enhance value for our stakeholders, including reliable execution of our plans, enhancing our productivity and cost performance, generating strong cash flow and building value through our organic growth pipeline. Market fundamentals for copper are positive, supported by copper’s increasingly important role in the global economy and limited available supplies to meet growing demand. Freeport is strongly positioned for the future as a leading producer of copper with multiple options for future growth and an experienced team with a track record of accomplishment.” SUMMARY FINANCIAL DATA.
a. For segment financial results, refer to the supplemental schedules, “Business Segments,” beginning on page IX.
b. Includes (unfavorable) favorable adjustments to prior period provisionally priced concentrate and cathode copper sales totaling $(7) million ($(2) million to net income attributable to common stock or less than $0.01 per share) in first-quarter 2024 and $210 million ($72 million to net income attributable to common stock or $0.05 per share) in first-quarter 2023. For further discussion, refer to the supplemental schedule, “Derivative Instruments,” on page VIII.
c. Includes net charges totaling $1 million (less than $0.01 per share) in first-quarter 2024 and $94 million ($0.06 per share) in first-quarter 2023, that are described in the supplemental schedule, “Adjusted Net Income,” on page VI.
d. FCX defers recognizing profits on intercompany sales until final sales to third parties occur. For a summary of net impacts from changes in these deferrals, refer to the supplemental schedule, “Deferred Profits,” on page IX.
e. Working capital and other uses totaled $97 million in first-quarter 2024 and $452 million in first-quarter 2023.
f. Includes $0.9 billion at March 31, 2024, associated with a portion of PT-FI’s export proceeds required to be temporarily deposited in Indonesia banks for 90 days in accordance with a regulation issued by the Indonesia government.
a. Reflects per pound weighted-average production and delivery costs and unit net cash costs (net of by-product credits) for all copper mines, before net noncash and other costs. For reconciliations of per pound unit net cash costs by operating division to production and delivery costs applicable to sales reported in FCX’s consolidated financial statements, refer to the supplemental schedules, “Product Revenues and Production Costs,” beginning on page XI. Responsible Production 2023 Annual Report on Sustainability. FCX expects to publish its 2023 Annual Report on Sustainability on FCX's website at fcx.com/sustainability on April 25, 2024. This marks FCX’s 23rd year of reporting on its sustainability progress. FCX is committed to building upon its achievements in sustainability and its position as a leading responsible copper producer. Consolidated Sales Volumes
• First-quarter 2024 copper sales of 1.1 billion pounds were 11% higher than the January 2024 estimate of 1.0 billion pounds and 33% higher than first-quarter 2023 sales of 0.8 billion pounds, primarily reflecting higher mining and milling rates and ore grades at PT-FI. First-quarter 2023 sales were also impacted by weather-related disruptions and the initial deferral of sales recognition related to the PT Smelting tolling arrangement.
• First-quarter 2024 gold sales of 568 thousand ounces approximated the January 2024 estimate of 575 thousand ounces. First-quarter 2024 gold sales were more than double first-quarter 2023 sales of 270 thousand ounces, primarily reflecting higher mining and milling rates and ore grades at PT-FI. First-quarter 2023 sales were also impacted by weather-related disruptions and the initial deferral of sales recognition related to the PT Smelting tolling arrangement. • First-quarter 2024 molybdenum sales of 20 million pounds approximated the January 2024 estimate and first-quarter 2023 sales of 19 million pounds. Consolidated sales volumes for the year 2024 are expected to approximate 4.15 billion pounds of copper, 2.0 million ounces of gold and 84 million pounds of molybdenum, including 1.0 billion pounds of copper, 500 thousand ounces of gold and 21 million pounds of molybdenum in second-quarter 2024.
PT-FI’s current export licenses for copper concentrates and anode slimes extend through May 2024. Consolidated sales volume estimates include exports of copper concentrates and anode slimes by PT-FI from June 2024 through December 2024 totaling 0.4 billion pounds of copper and 0.9 million ounces of gold. Consolidated copper and gold production volumes for the year 2024 are expected to exceed 2024 sales volumes, reflecting the deferral of approximately 90 million pounds of copper and 120 thousand ounces of gold that will be processed by the Manyar smelter and precious metals refinery (PMR) (collectively, the Indonesia smelter projects) and sold as refined metal in future periods.
Projected sales volumes are dependent on operational performance; extension of PT-FI’s export permits for copper concentrates and anode slimes beyond May 2024; the timing of the ramp-up of the Indonesia smelter projects; weather-related conditions, including ongoing El Niño weather impacts; timing of shipments and other factors detailed in the “Cautionary Statement” below. Consolidated Unit Net Cash Costs First-quarter 2024 consolidated average unit net cash costs (net of by-product credits) for FCX’s copper mines of $1.51 per pound of copper were lower than the January 2024 estimate of $1.55 per pound, primarily reflecting higher copper volumes at PT-FI, partly offset by lower by-product credits. First-quarter 2024 consolidated average unit net cash costs (net of by-product credits) for FCX’s copper mines of $1.51 per pound of copper were lower than first-quarter 2023 average unit net cash costs of $1.76 per pound, primarily reflecting higher copper volumes at PT-FI and higher by-product credits, partly offset by higher export duties at PT-FI. Refer to “Operations” below for further discussion. Consolidated unit net cash costs (net of by-product credits) for FCX’s copper mines are expected to average $1.57 per pound of copper for the year 2024 (including $1.57 per pound of copper in second-quarter 2024), based on achievement of current sales volume and cost estimates and assuming average prices of $2,300 per ounce of gold and $20.00 per pound of molybdenum for the remainder of 2024. Quarterly unit net cash costs vary with fluctuations in sales volumes and realized prices, primarily for gold and molybdenum. The impact of price changes on consolidated unit net cash costs would approximate $0.04 per pound of copper for each $100 per ounce change in the average price of gold and $0.02 per pound of copper for each $2 per pound change in the average price of molybdenum for the remainder of 2024. OPERATIONS Leaching Innovation Initiatives.
FCX is continuing to advance a series of initiatives across its North America and South America operations to incorporate new applications, technologies and data analytics to its leaching processes. In late 2023, FCX achieved its initial annual run rate target of approximately 200 million pounds of copper. Incremental copper production from these initiatives totaled 51 million pounds in first-quarter 2024, compared with 22 million pounds in first-quarter 2023. FCX is pursuing opportunities to apply recent operational enhancements at a larger scale and is testing new technology applications that it believes have the potential for significant increases in recoverable metal beyond the current run rate. North America. FCX manages seven copper operations in North America – Morenci, Bagdad, Safford (including Lone Star), Sierrita and Miami in Arizona, and Chino and Tyrone in New Mexico. FCX also operates a copper smelter in Miami, Arizona. In addition to copper, certain of these operations produce molybdenum concentrate, gold and silver. All of the North America operations are wholly owned, except for Morenci. FCX records its 72% undivided joint venture interest in Morenci using the proportionate consolidation method. Development Activities. FCX has substantial reserves and future opportunities in the U.S., primarily associated with existing operations. FCX has a potential expansion project to more than double the concentrator capacity of the Bagdad operation in northwest Arizona. Bagdad’s reserve life currently exceeds 80 years and supports an expanded operation. In late 2023,
FCX completed technical and economic studies, which indicated the opportunity to construct new concentrating facilities to increase copper production by 200-250 million pounds per year, more than double Bagdad’s current annual production rate. Estimated incremental project capital costs approximate $3.5 billion (excluding infrastructure that would be required in the long-range plans). Expanded operations would provide improved efficiency and reduce unit net cash costs through economies of scale. Project economics indicate that the expansion would require an incentive copper price in the range of $3.50 to $4.00 per pound and would require approximately three to four years to complete. The decision to proceed and timing of the potential expansion will take into account overall copper market conditions, availability of labor and other factors, including progress on conversion of the existing haul truck fleet to autonomous and expanding housing alternatives to support long-range plans. In parallel, FCX is advancing activities for expanded tailings infrastructure projects required under long-range plans in order to advance the potential construction timeline.
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COMTEX_451339488/2227/2024-04-24T09:40:17
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