Grupo Mexico posts profit rise on copper sales, transport unit

Mining and rail conglomerate Grupo Mexico, one of the world’s largest copper producers, reported on Thursday a 38% rise in second-quarter net profit on higher copper sales and solid results from its transportation unit.

Earnings hit 11 cents per share, beating the Refinitiv estimate of 9 cents a share.

Sales of copper, which account for the majority of the mining division’s operations, rose nearly 13% from the year-ago quarter, with production up 9.2% in part because of higher ore grades at its Toquepala mine in Peru.

The rise in revenue came despite copper prices dipping 11% from the same time last year to an average of $4.34 a pound, said Grupo Mexico, which is controlled by Mexico’s second-richest person, billionaire German Larrea.

The company said it aimed produce 1.048 million metric tons of copper this year, slightly above the 1.007 million metric tons produced last year.

“Through the rest of the year, we believe the company could maintain the positive trend, with a resilient outlook for some metals and an intensive investment plan,” analysts at brokerage Monex wrote.

Grupo Mexico bumped its planned capital expenditures for the year up to $1.83 billion from the $1.76 billion previously estimated, saying the funds would go to improvement and expansion projects.

However, the company will need to assess political issues in Peru in the short term, the Monex analysts said.

Protests restarted last week calling for President Dina Boluarte step down. Earlier this year, demonstrations and roadblocks snarled some of the country’s mining production.

Grupo Mexico’s overall revenue during the April-to-June period rose almost 8% to $3.45 billion, it said, also propped up by increased volumes moved by its transportation division, Grupo Mexico Transportes.

(By Kylie Madry, Carolina Pulice and Noe Torres; Editing by Isabel Woodford and Jamie Freed)