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SCCO

Southern Copper Corporation – Copper, Nickel, Lead, and Zinc Mining
Southern Copper Corporation is one of the largest integrated copper producers in the world and has the largest copper reserves of the industry. The company is a NYSE and Lima Stock Exchange listed company that is 88.9% owned by Grupo Mexico, a Mexican company listed on the Mexican Stock Exchange. The remaining 11.1% ownership interest is held by the international investment community. Southern Copper Corp. operates mining units and metallurgical facilities in Mexico, Peru and conduct exploration activities in Argentina, Chile, Ecuador, Mexico and Peru.
Analysis Results
Intrinsic Value $375.72
Latest Price $48.30
Relative Value 87% undervalued
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Cash Flow (Billions)
Analysis Parameters
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Analysis Details
Growth Rate Projection

An exponential growth model was fit to the past cash flow data, giving more weight to more recent years. This model determined a growth rate estimate of 41.7%.

Weighted Average Cost of Capital (WACC)

The calculated WACC is 7.1%. This value is used as the default discount rate.

Value of Future Flows

Assuming a growth rate of 41.7%, the cash flows for the next 5 years are projected.

The present value of each year's flow is adjusted to present value using the discount rate.

Year Future flow (billion) Present value (billion)
2022 4.64 4.34
2023 6.58 5.74
2024 9.32 7.59
2025 13.2 10.0
2026 18.7 13.3
Terminal Value

Assuming a growth rate after the projection years of 2.0%, the terminal value of the company would be 376 billion. This corresponds to a present value of 249 billion.

Intrinsic Value Per Share

The total present value of the projected cash flows is 41.0 billion. Adding in the terminal value gives a total present value of 290 billion.

There are presently 773.0 million outstanding shares, so the intrinsic value per share is 375.72.

Financial Statements

The following data was to determine the past cash flows.

Current Assets 6,139,600,000
Current Cash 3,488,900,000
Current Liabilities 2,250,000,000
Current Debt 299,700,000
Non-Cash Working Capital (NCWC) 700,400,000
Change in NCWC -135,600,000
EBIT 6,078,700,000
Tax Provision 2,299,200,000
Depreciation and Amortization 806,000,000
Capital Expenditure -892,300,000
Unlevered Free Cash Flow 3,409,309,974
Current Assets 4,815,200,000
Current Cash 2,594,400,000
Current Liabilities 1,384,800,000
Current Debt 0
Non-Cash Working Capital (NCWC) 836,000,000
Change in NCWC -266,200,000
EBIT 3,127,100,000
Tax Provision 1,174,400,000
Depreciation and Amortization 775,600,000
Capital Expenditure -592,200,000
Unlevered Free Cash Flow 1,709,925,230
Current Assets 4,184,700,000
Current Cash 2,005,800,000
Current Liabilities 1,476,500,000
Current Debt 399,800,000
Non-Cash Working Capital (NCWC) 1,102,200,000
Change in NCWC 196,900,000
EBIT 2,763,700,000
Tax Provision 945,300,000
Depreciation and Amortization 764,400,000
Capital Expenditure -707,500,000
Unlevered Free Cash Flow 1,945,562,690
Current Assets 3,180,000,000
Current Cash 1,058,400,000
Current Liabilities 1,216,300,000
Current Debt 0
Non-Cash Working Capital (NCWC) 905,300,000
Change in NCWC -41,200,000
EBIT 2,893,500,000
Tax Provision 1,053,500,000
Depreciation and Amortization 674,300,000
Capital Expenditure -1,121,400,000
Unlevered Free Cash Flow 1,233,542,141
Current Assets 3,170,100,000
Current Cash 1,055,300,000
Current Liabilities 1,168,300,000
Current Debt 0
Non-Cash Working Capital (NCWC) 946,500,000
Change in NCWC -23,300,000
EBIT 2,621,600,000
Tax Provision 1,593,400,000
Depreciation and Amortization 671,100,000
Capital Expenditure -1,023,500,000
Unlevered Free Cash Flow 449,848,129
Current Assets 2,566,100,000
Current Cash 597,300,000
Current Liabilities 999,000,000
Current Debt 0
Non-Cash Working Capital (NCWC) 969,800,000
Change in NCWC 283,800,000
EBIT 1,588,100,000
Tax Provision 501,100,000
Depreciation and Amortization 647,100,000
Capital Expenditure -1,118,500,000
Unlevered Free Cash Flow 778,735,088
Current Assets 2,484,200,000
Current Cash 878,000,000
Current Liabilities 920,200,000
Current Debt 0
Non-Cash Working Capital (NCWC) 686,000,000
Change in NCWC -150,325,000
EBIT 1,431,200,000
Tax Provision 464,900,000
Depreciation and Amortization 510,700,000
Capital Expenditure -1,149,600,000
Unlevered Free Cash Flow 90,262,827
Current Assets 2,489,789,000
Current Cash 702,559,000
Current Liabilities 1,150,905,000
Current Debt 200,000,000
Non-Cash Working Capital (NCWC) 836,325,000
Change in NCWC 84,822,000
EBIT 2,256,701,000
Tax Provision 754,629,000
Depreciation and Amortization 444,971,000
Capital Expenditure -1,529,799,000
Unlevered Free Cash Flow 442,875,409
Current Assets 3,416,050,000
Current Cash 1,880,963,000
Current Liabilities 783,584,000
Current Debt 0
Non-Cash Working Capital (NCWC) 751,503,000
Change in NCWC -95,535,000
EBIT 2,553,017,000
Tax Provision 769,322,000
Depreciation and Amortization 395,970,000
Capital Expenditure -1,703,349,000
Unlevered Free Cash Flow 329,509,859
Current Assets 4,287,959,000
Current Cash 2,593,786,000
Current Liabilities 857,135,000
Current Debt 10,000,000
Non-Cash Working Capital (NCWC) 847,038,000
Change in NCWC 98,485,000
EBIT 3,473,818,000
Tax Provision 1,080,872,000
Depreciation and Amortization 325,743,000
Capital Expenditure -1,051,900,000
Unlevered Free Cash Flow 1,603,773,574

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