Southern Falls Most in Six Weeks on Dividend, Copper: Lima Mover
January 30, 2012, 3:23 PM ESTBy Alex Emery
Jan. 30 (Bloomberg) -- Southern Copper Corp., Peru’s largest producer of the metal, headed for the biggest decline in six weeks as copper prices fell and a quarterly dividend failed to meet investor expectations.
Southern Copper, a unit of Grupo Mexico SAB, slumped 4.7 percent to $34.40 at 12:36 p.m. in Lima, which would be the steepest decline on a closing basis since Dec. 13. The stock has gained 15 percent this month.
Phoenix, Arizona-based Southern Copper declared on Jan. 27 a 19 cent cash payment and a stock dividend of 0.0107 shares per common stock payable Feb. 28 to shareholders of note on Feb. 15. The company paid a 70-cent dividend in the previous quarter. Copper fell the most in three weeks as European leaders struggled to reach an accord on a Greek debt bailout, dimming prospects for global growth and metals demand.
“Investors were expecting a bigger dividend comparable to previous quarters,” said Inteligo SAB analyst Rodrigo Zuazo. “The drop in copper prices is also hitting the shares.”
Copper futures for March delivery declined 1.6 percent to $3.8265 a pound on the Comex in New York after earlier dropping as much as 2.4 percent, the biggest loss since Jan. 4.
The “dividends will provide shareholders a return on their investment while Southern Copper maintains a strong cash position,” the company said in a Jan. 27 statement.
Expansion Plans
Southern Copper is working on a $3 billion expansion of its Buenavista mine in Mexico and is investing $900 million in upgrades at its Peruvian Toquepala and Cuajone mines, Chief Executive Officer Oscar Gonzalez Rocha said Nov. 4. The company’s $900 million Tia Maria project was suspended by environmental protests last year.
Southern Copper is yet to set a date for disclosing fourth- quarter results after the company said last week that it may report earnings on Jan. 27.
--Editors: Glenn J. Kalinoski, James Attwood.
To contact the reporter on this story: Alex Emery in Lima at aemery1@bloomberg.net
To contact the editor responsible for this story: David Papadopoulos at papadopoulos@bloomberg.net
