Grupo Mexico posts 17% profit jump on higher metals prices

Mining and transport conglomerate Grupo Mexico reported a 17% jump in first-quarter net profit on Friday, primarily driven by higher metal prices.

Net profit rose to $1.09 billion, well above the $816 million estimate from analysts polled by LSEG, as copper and silver prices surged and the miner trimmed production costs.

Shares climbed around 2% in afternoon trading.

Copper production and sales were nearly flat from the year-ago quarter, with output from US unit Asarco slipping.

Prices for the red metal, however, rose 18% from a year ago while silver leaped some 38%.

That brought revenue for Grupo Mexico, which also operates sprawling freight railroads and an infrastructure division, up 10% to $4.20 billion in the quarter.

The company also touted trimmed production costs for copper and byproducts as adding an earnings boost.

Grupo Mexico, controlled by billionaire German Larrea, is one of the world’s largest copper producers with mines in Peru, the United States, Spain and its home base of Mexico.

The company could be at risk from the trade war breaking out between the United States and China, with copper prices slumping since the end of the first quarter.

“Although we maintain a very positive long-term outlook for copper, we believe an intense commercial war between the US and China will affect economic growth worldwide, consequently impacting copper demand,” mining head Leonardo Contreras said in the firm’s results call.

Beijing imposed 125% duties on US shipments earlier this month in response to US President Donald Trump’s 145% tariffs on Chinese imports.

Copper was exempted from Trump’s sweeping tariffs in March, though analysts say import taxes on the metal could be coming as well.

Contreras declined to say how Grupo Mexico was planning to offset the impact of potential tariffs on copper shipped into the United States.

(By Kylie Madry, Natalia Siniawski and Rafael Escalera Montoto; Editing by Bill Berkrot and Chizu Nomiyama)