Grupo Mexico reported a 34% increase in net profit for the second quarter, reaching $1.122 billion, significantly surpassing analyst expectations of $952.6 million. The company’s revenue also rose by 27% to $4.397 billion, exceeding forecasts of $4.09 billion.
The surge in profit was attributed to higher copper prices, which rose approximately 8% during the quarter, and increased mining output. Analysts from JPMorgan noted that the strong copper prices more than offset softer sales volumes and unexpectedly high costs.
As one of the world’s largest copper producers, Grupo Mexico operates mines in Peru, the United States, Spain, and Mexico, alongside major freight railroads. The company reported quarterly copper production of 270,747 metric tons, a 4.7% increase from the previous year, driven by enhanced output from its operations in Peru and Mexico. Mining sales rose by 33% to $3.4 billion.
Grupo Mexico has revised its copper production forecast for the year to 1.08 million tons, up from a previous estimate of 1.06 million tons. Additionally, the company has restarted work on the Tia Maria project in southern Peru, which had been stalled for over a decade due to environmental concerns. Construction is anticipated to begin in 2025, with production expected to start by 2027, ultimately yielding 120,000 tons of copper annually.
The company projected that Tia Maria could generate $17.5 billion in exports and contribute $3.4 billion in taxes and royalties over its first 20 years of operation. Grupo Mexico is currently reviewing its planned $1.4 billion investment in the project and will provide updates by the end of 2024.
In the transport sector, Grupo Mexico’s sales increased by 9% to $881 million. However, the rail network has faced challenges due to congestion caused by a high number of migrants, which has affected performance and raised costs.