The company is operating in
mining of natural resources at entire part of the world. The company manages
resources such as Gold, Copper, molybdenum, cobalt, oil and gas. It also has smelting
plant in several areas in North America and Indonesia.
The key driver of the revenue based on its annual report of
2013 is refined copper with 35.7 % of total revenue. The second and third are
copper in concentrate and Gold as the following data:
|
Segment
|
2012
|
2013
|
|
Refined Copper Product
|
53.9
|
35.7
|
|
Copper in concentrate
|
25.5
|
33.7
|
|
Gold
|
9.7
|
7.9
|
|
Molybdenum
|
6.6
|
5.3
|
|
Oil
|
0
|
11
|
|
Other
|
4.4
|
6.4
|
|
Revenue by Location
|
2011
|
2012
|
2013
|
|
US
|
34.4
|
34.9
|
45.0
|
|
Japan
|
12.0
|
12.1
|
10.2
|
|
Indonesia
|
10.9
|
11.4
|
7.9
|
The copper in concentrate seems
increase in its contribution to revenue from 25.5 % in to 33.7 %. Mean while
the refined copper product is decline from 53.9 % of total revenue in to 35.7 %
of total revenue. Based on Bloomberg
copper commodities decrease 12 % in 2013 compared to 2012 year on year and this decline causes the decrease in
copper demand especially for refined copper product.
FCX has the world biggest gold
and copper deposit in the Grasberg mineral district (according to annual
report) in Papua, Indonesia. By location, Indonesia contributes 8 % of total
revenue for FCX in 2013. It is the third largest revenue of the company. The
biggest contribution by area is at united stated of America.
CAGR of revenue in period of 2009
– 2013 is at 8 %, inversely to CAGR of net income, which is at -0.7 %. Cost
sales and operating expense seems as a big challenge for the company for
getting profit. Depreciation and amortization is almost double in 2013 compared
to 2012. In 2013, the company invests in oil and gas exploration segment to
expand its portfolio and it might have been a diversification strategy for
anticipating the unsteady circumstances of oil and gas price.
|
Copper
|
Gold
|
Molybdenum
|
|
|
Mineral reserve
|
(billion pounds)
|
(million ounces)
|
(billion pounds)
|
|
North America
|
36.2
|
0.4
|
2.6
|
|
South America
|
37.0
|
1.1
|
0.7
|
|
Indonesia
|
30.0
|
29.8
|
0.0
|
|
Africa
|
8.0
|
0.0
|
0.0
|
Forecast
|
Ratio & Item
|
2012
|
2013
|
2014
|
2015
|
2016
|
|
Net Profit margin
|
22.1
|
16.4
|
6.0
|
9.2
|
11.9
|
|
Asset Turn Over
|
50.8
|
33.0
|
34.2
|
34.8
|
35.2
|
|
ROA
|
11.2
|
5.4
|
2.0
|
3.2
|
4.2
|
|
Financial Leverage
|
202.0
|
303.2
|
296.9
|
285.4
|
270.7
|
|
ROE
|
22.7
|
16.4
|
6.0
|
9.2
|
11.3
|
|
Net sales
|
18,010.0
|
20,921.0
|
22,594.7
|
24,402.3
|
26,354.4
|
|
Capex
|
-
|
29,199.0
|
1,046.1
|
1,129.7
|
1,220.1
|
|
Free Cash Flow
|
-
|
-8,278
|
21,548.6
|
23,272.5
|
25,134.3
|
Compound annual growth rate of
net sales in period of 2009 – 2013 is at 8.6 %, so I took 8 % growth in the
next three years. For capital expenditure, I use assumption that the company
allocates 5% of its revenue. Capital expenditure is financed with long term
debt and equity. I made assumption the operating cycles in the next three years
are fixed, same with the last year.
In 2013, the company allocated their fund in oil and Gas
segment that is why the company spends a lot of money in its capital
expenditure for completing the acquisition as the long term debt raised in
2013.
The location of oil and gas assets consist of deep water
Gulf of Mexico, eagle ford in Texas, California, Haynesville, central Wyoming
and etc. the majority of oil and gas proved reserve is at California, second is
at gulf of Mexico.
