Besides Favourable Copper Price, Is Freeport’s Financial Success Propelled By ESG Excellence?
Hong Kong, Aug 2, 2024
Freeport-McMoRan Inc. (NYSE: FCX, US$60bn market cap) is a leading international mining company headquartered in Phoenix, Arizona, and the company is one of the world’s largest producers of copper, gold, and molybdenum, with significant assets in the Grasberg minerals district in Indonesia, home to one of the world’s largest copper and gold deposits. Additionally, the company maintains substantial mining operations across North and South America. Below is a snapshot of its latest financial performance.
Financial highlights
2023 | 2024 | YoY | QoQ | ||
|---|---|---|---|---|---|
Period end date | 30-Jun-2023 | 31-Mar-2024 | 30-Jun-2023 | ||
Revenue | 5,737.0 | 6,321.0 | 6,624.0 | 15.46% | 4.79% |
Net income | 343.0 | 473.0 | 616.0 | 79.59% | 30.23% |
Net margin | 5.98% | 7.48% | 9.30% | 55.54% | 24.28% |
EPS | 0.23 | 0.33 | 0.42 | 82.61% | 27.27% |
Source: Refinitiv
Operational performance
2023 | 2024 | YoY | QoQ | ||
|---|---|---|---|---|---|
Period end date | 30-Jun-2023 | 31-Mar-2024 | 30-Jun-2023 | ||
Copper, avg price / metric ton | 8,332.05 | 8,549.03 | 9,720.72 | 16.67% | 13.71% |
Gold, avg price / troy ounce | 1,942.00 | 2,145.00 | 2,299.00 | 18.38% | 7.18% |
Copper production (metric tons) | 491,749 | 500,045 | 477,923 | -2.81% | -4.42% |
Gold production (troy ounces) | 483,000 | 549,000 | 443,000 | -8.28% | -19.31% |
Source: Refinitiv
Financial position
2023 | 2024 | YoY | QoQ | ||
|---|---|---|---|---|---|
Period end date | 30-Jun-2023 | 31-Mar-2024 | 30-Jun-2023 | ||
Cash and short-term investments | 6,683 | 5,208 | 5,273 | -21.10% | 1.25% |
Total assets | 50,907 | 54,198 | 54,635 | 7.32% | 0.81% |
Total liabilities | 34,705 | 37,225 | 37,231 | 7.28% | 0.02% |
Total equity | 16,202 | 16,973 | 17,404 | 7.42% | 2.54% |
Net debt | 12,637 | 15,349 | 15,435 | 22.14% | 0.56% |
Cash from opeating | 2,723 | 1,896 | 3,852 | 41.46% | 103.16% |
Source: Refinitiv
In the second quarter of 2024, Freeport experienced significant improvements in its financial performance (Revenue: +15.5% YoY, +4.8% QoQ, Net Income: +80% YoY, +30% QoQ). Despite some operational challenges, particularly in production led by the lower ore grades, maintenance and downtime, and export permitting delay, the company delivered strong financial results by leveraging favourable copper price.
ESG Performance
2021 | 2022 | |||
|---|---|---|---|---|
Rating | Ranking | Rating | Ranking | |
ESG score | A- | 5% | A- | 5% |
Environmental pillar score (35.2%) | A | 6% | A- | 8% |
Social pillar score (40.2%) | A- | 12% | A- | 15% |
Governance pillar score (24.6%) | A | 6% | A+ | 2% |
ESG controversies score | A+ | 0% | B+ | 83% |
It is worth noting that Freeport’s ESG performance has remained strong and stable. All being said, does the company merit its position in the top 10 copper stocks to hold for the next decade?