Grupo Mexico, the mining and transport conglomerate, reported a 17% increase in its net profit for the first quarter, reaching $1.09 billion, significantly surpassing the $816 million estimated by analysts. The surge in profit was largely driven by a rise in metal prices, particularly copper and silver, alongside efforts to reduce production costs. The company’s shares climbed by around 2% in afternoon trading following the announcement.
While copper production and sales remained relatively stable compared to the same period last year, with a slight decline in output from its U.S. unit Asarco, copper prices saw an 18% increase. Silver prices surged even more dramatically, jumping 38% year-on-year. These price gains helped Grupo Mexico achieve a 10% rise in revenue, which reached $4.20 billion for the quarter. Additionally, the company reported lower production costs for copper and its byproducts, which contributed positively to its earnings.
Grupo Mexico, controlled by billionaire German Larrea, remains one of the world’s largest copper producers, with operations spanning Peru, the United States, Spain, and its home base in Mexico. The company also has extensive freight railroad and infrastructure divisions that further diversify its revenue streams. Despite the strong performance in the first quarter, the company expressed concerns about potential risks arising from the ongoing trade tensions between the United States and China. Leonardo Contreras, the mining head at Grupo Mexico, acknowledged that an intensifying trade war could negatively impact global economic growth and subsequently reduce copper demand. This is especially relevant as Beijing imposed steep tariffs of 125% on U.S. shipments of certain goods, including copper, in retaliation for President Donald Trump’s tariffs on Chinese imports.
Copper was exempt from Trump’s tariffs in March, but analysts speculate that import taxes on copper might be implemented in the future, which could create additional challenges for Grupo Mexico. However, the company refrained from discussing specific strategies to mitigate the potential effects of these tariffs on its copper exports to the U.S.
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