GuruFocus -
- EBITDA (2024): $10 billion, 14% increase from 2023.
- Operating Cash Flows (2024): Over $7 billion, 35% increase from the prior year.
- Average Copper Realization (2024): $4.21 per pound.
- Average Gold Realization (2024): Slightly above $2,400 per ounce.
- Capital Expenditures (2024): $3.6 billion.
- Projected Capital Expenditures (2025 & 2026): Approximately $4.4 billion per year.
- Cash Cost Estimate (2025): $1.60 per pound, compared to $1.56 per pound in 2024.
- Projected EBITDA (2026 & 2027): Ranges from over $11 billion at $4 copper to over $15 billion at $5 copper.
- Projected Operating Cash Flows (2026 & 2027): Nearly $8 billion per year at $4 copper and over $11 billion per year at $5 copper.
- Debt Redemption (Q4 2024): $730 million in maturing senior notes.
- Shareholder Distributions: $4.7 billion through dividends and share purchases since implementing the financial policy.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Freeport-McMoRan Inc (NYSE:FCX) achieved $10 billion in EBITDA for 2024, a 14% increase from 2023.
- The company reported operating cash flows of over $7 billion in 2024, a 35% improvement from the previous year.
- Freeport-McMoRan Inc (NYSE:FCX) is focused on scaling its leach opportunity, targeting a run rate of 300 million pounds by the end of 2025.
- The company has a strong financial position with a net debt of approximately $1 billion, providing flexibility for future investments.
- Freeport-McMoRan Inc (NYSE:FCX) is advancing several organic growth projects, including brownfield expansions in the US and South America.
- The company is facing challenges with obtaining export permits from the Indonesian government, which could impact production rates.
- Freeport-McMoRan Inc (NYSE:FCX) is dealing with the aftermath of a fire at its Indonesian smelter, requiring repairs and impacting operations.
- The company is subject to a 7.5% export tax in Indonesia, which affects its cost structure.
- There is uncertainty regarding the timeline for legislative approval of a 10% tax credit for copper as a critical mineral in the US.
- Freeport-McMoRan Inc (NYSE:FCX) faces geopolitical risks, particularly in Indonesia, which could impact its operations and financial performance.
A: We are making good progress with the Indonesian government and expect to receive export approval in the near term. Our inventories are building, but if we get the export permit as expected in the coming weeks, we will be able to start shipping exports and manage inventory levels effectively. - Kathleen Quirk, President and CEO
Q: What are the next steps for copper to qualify for the 10% tax credit, and is it possible in 2025?
A: The tax credit qualification depends on US legislation. A bill passed the House last year, and further legislative processes are needed. While we can't predict the timing, there is bipartisan support, and it remains possible for 2025. This would be significant, potentially providing a $500 million benefit. - Kathleen Quirk, President and CEO
Q: Regarding discretionary CapEx for 2025, is the $400 million for Bagdad tailings infrastructure tied to expansion, and what about the $600 million at Kucing Liar?
A: The Bagdad tailings infrastructure is not immediately necessary and could be deferred if we don't proceed with expansion. The $3.5 billion capital for Bagdad is incremental, excluding tailings. For Kucing Liar, the investment supports long-term production sustainability at Grasberg, aligning with our plans to maintain high production rates. - Kathleen Quirk, President and CEO
Q: How does Freeport view geopolitical risks, particularly in Indonesia, and is M&A a potential strategy for diversification?
A: We have confidence in our long-term operations in Indonesia, supported by a strong history. We are excited about opportunities in the Americas, especially in the US, with initiatives like the leach project. While we monitor M&A opportunities, our strategy focuses on organic growth and value creation without relying on acquisitions. - Kathleen Quirk, President and CEO
Q: Is there insurance coverage for the additional work to fix the fire at the Grasberg smelter, and what is the timeline for the license extension with the new Indonesian government?
A: The repair cost of approximately $100 million is covered by insurance. We are engaged with the new Indonesian government and hope to apply for the license extension during 2025, aligning with the smelter's full integration and meeting regulatory requirements. - Kathleen Quirk, President and CEO
For the complete transcript of the earnings call, please refer to the full earnings call transcript.