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Shipping delays see Freeport miss sales target

Shipping delays in Indonesia saw Freeport McMoRan miss its sales target for the June quarter, but elevated copper prices meant the company continued to generate strong cash flow.
Shipping delays see Freeport miss sales target Shipping delays see Freeport miss sales target Shipping delays see Freeport miss sales target Shipping delays see Freeport miss sales target Shipping delays see Freeport miss sales target

Sales totalled 929 million pounds of copper, 5% below the company's April estimate of 975lb.

"Logistics is an issue globally," Richard Adkerson, Freeport's CEO, said on the company's earnings call.

Production was flat quarter on quarter at 913Mlbs, while average copper prices of US$4.34 (up from $3.94/lb in Q1) saw the company deliver net income of US$1.1 billion.

Operating cash flow amounted to US$2.4 billion, up from US$1.1 billion at the end of March.

Analysts at Jefferies said the results were "at least as good as expected from an underlying basis".

On future production, Freeport said the ramp-up of underground production at Grasberg in Indonesia continued to advance on schedule. This will boost copper volumes to 1.55Blb over the coming years from about 1.3Blb in 2021.

In North America, the company said it was looking at ways of increasing production at Lone Star to over 300Mlb annually from current design capacity of about 200Mlb.  

"The outlook for the company is arguably improving as management continues to provide additional colour regarding the company's unique, high quality, low risk organic growth pipeline," said Jefferies.