Stock presentation Grupo Mexico
As with AFG, I tend to go back to the fundamentals here.
Short introduction to the company and the main source of business:
Grupo Mexico is the largest mining group in Mexico and the third largest copper producer in the world. Through its subsidiary Ferrocarill Mexicano (Ferromex), it operates the largest rail network in Mexico.
So much from Wikipedia, now let's move on to Investor Relations:
Gross margin is 60.4%
Dividend yield currently 5.9% with 4 distributions/year
Market cap 32 billion
P/E RATIO 10
Part 1: Rail and Transportation
25% of Ferromex belongs to Union Pacific
Total portfolio includes 11,000 KM of rail in Mexico, Texas & Florida, again connecting 5 ports in the Pacific, 4 in the Gulf and 4 in the Atlantic.
Passenger transfers occupy about 12-15% of the load here, with freight accounting for 85%.
Short excerpt from the 2020 annual report: 86 million tons of copper and 18 million cars were moved over the rail network in the year, requiring 816 locomotives and 26,319 rail cars.
The 4 subdivisions of the railroad are divided into:
- Ferrosur
- Florida East Coast
- Intermodal Mexico
- Texas Pacifico
The most interesting project, to highlight it a bit, is the "Dr. Vagon" a medical train serving the underdeveloped regions of Mexico, forming a small traveling hospital with 17 wagons.
EBITDA Transport 2021: 1.12 billion $
Part 2 Infrastructure projects and construction:
The Second Arm of Grupo Mexico is the Infrastructure and Construction Division,
- This includes highways of a total length of 300 KM which are maintained,
- A 74MW wind farm consisting of 37 wind turbines with 5 substations.
- 5 jack-up rigs for drilling projects, among others for Shell in the Gulf of Mexico.
EBITDA $226 million
The whole thing is definitely expandable and Grupo Mexico itself writes on their site that they want to invest more in green energy.
Part 3 Mining:
First a few key data
- Largest producer in Mexico and Peru.
- 3. Largest producer in the USA.
- 4th largest copper producer in the world.
- Largest copper reserves in the world.
- Lowest production costs in the industry.
- 15 underground and open pit mines
- 52 smelting and casting operations
- 8 exploration projects underway
Main raw materials besides copper:
- Silver
- gold
- zinc
- molybdenum
- selenium
Ongoing projects:
Buenavista/Sonora, zinc 100,000 tons per year 20,000 T copper (3rd largest copper mine in the world).
Pilares/Sonora 35,000 tons of copper
El Pilar/Sonora the newest mine:
281 million tons of rock with a copper value of 0.30% -> expected to produce 36,000 tons of copper per year with a life of 13 years -> 281 million tons of rock for 169,000 tons of copper
In addition, $7.7 billion will be invested in El Arco & Empalme projects over the next 10 years
Southern Copper Corporation:
Although Southern Copper is listed on the stock exchange, it is a 100% subsidiary of Grupo Mexico. CORPORATE STRUCTURE - SCC - Eng (southerncoppercorp.com)
2021 398 million tons of copper could be mined in Peru alone
EBITDA Mining 7.58 billion $
Attached is a picture of me, a Serbian copper mine, so you get a feeling how incredibly huge these open pit mines are.
.::Grupo México::. (gmexico.com)
.::Grupo México::. (gmexico.com)
