Lima Stock exchange Companies See Record Profits Driven by Mining Sector Surge
The Lima Stock Exchange (LSE) has witnessed a remarkable financial performance in the final quarter of 2024, with leading companies reporting net profits totaling S/ 7,781 million, according to estimates by Kallpa SAB. This figure represents a staggering 66.3% annual increase, marking the third consecutive quarter of growth.
This upward trend follows earlier gains, with profits rising by 69% in the second quarter and 87% in the third quarter of 2023. The driving force behind this surge? The mining sector, which has reaped the benefits of higher metal prices and increased production levels.
Mining Sector Leads the Charge
The mining sector alone generated a net profit of US$ 1,367 million between September and December 2024, nearly doubling the US$ 716 million reported in the same period the previous year. Key players like Buenaventura, Southern Copper, and Volcan have contributed significantly to this growth.
Kallpa SAB attributes this success to several factors:
- Higher metal prices, especially for copper, gold, silver, zinc, and tin.
- Increased production levels at Buenaventura, Southern Copper, and Volcan.
- Operational efficiencies at Volcan and Nexa.
- The absence of an extraordinary provision in Buenaventura, which had impacted the fourth quarter of 2023.
copper Companies Shine
Copper companies, in particular, have seen their profits soar by 66.1% annually, driven by Southern Copper‘s increased production and a 12.6% rise in copper prices. Meanwhile, polymetallic companies have turned around their fortunes, reporting a net profit of US$ 56.7 million in Q4 2024, compared to a net loss of US$ 11.5 million in the same quarter of 2023. This turnaround is largely due to higher silver production at Volcan and Nexa Perú.
Key Takeaways
The table below summarizes the key financial highlights:
| Metric | Q4 2024 | Q4 2023 | Annual Change |
|—————————|——————-|——————-|——————-|
| Net Profits (LSE) | S/ 7,781 million | S/ 4,680 million | +66.3% |
| Mining Sector Profits | US$ 1,367 million | US$ 716 million | +90.9% |
| Copper Companies Profits | US$ 1,310 million | US$ 789 million | +66.1% |
| Polymetallic Companies | US$ 56.7 million | (US$ 11.5 million)| N/A |
What’s Next for the LSE?
The Lima Stock Exchange continues to solidify its position as a hub for robust financial performance, particularly in the mining sector. With metal prices remaining favorable and operational efficiencies improving, the outlook for 2025 appears promising.
For investors, this presents an opportunity to capitalize on the growing momentum. As Peruvian investors increasingly diversify their portfolios, the LSE stands out as a compelling option.
READ ALSO: Peruvian investors reinforce their commitment to the US stock market before Trump
The Lima Stock Exchange is not just a local success story—it’s a testament to the resilience and potential of Peru’s economy. As the mining sector continues to thrive, the LSE is poised to remain a key player in the global financial landscape.—
Image Source: Lima Stock Exchange
The Lima Stock Market: A Mining-Driven Surge and Financial Sector Rebound
The Lima stock market has long been synonymous with the mining sector, and recent developments have only reinforced this connection.According to Enrique Castellanos, a professor at the Universidad del Pacífico, the performance of mining companies has a profound impact on the financial results of listed companies. “If we talk about mining,the effect of the price is day and night,as the costs are almost the same,so if the price rises,everything goes to profit,” he explained in an interview with Gestión.This year, the absence of significant social protests or natural disasters—unlike the challenges faced in 2023—has allowed mining companies to thrive. The sector’s robust performance has cascaded into the broader market, driving profits for many listed companies.
Domestic Demand and Financial Sector Growth
While mining remains the backbone of the Lima stock market, other sectors have also shown remarkable growth. Companies tied to domestic demand reported profits of S/ 2,638 million in the last quarter of 2024, a 30% increase compared to the same period in 2023. This surge was largely fueled by strong performances in the financial and energy sectors.
The financial sector, in particular, has been a standout performer. Profits in this sector soared by 49.0% annually, reaching S/ 1,627 million. This growth was driven by reduced provisions for bad debt, thanks to improved payment behavior among clients of the banking system.
A turning point came in the third quarter of 2024, when the mora (delinquency) rate for loans began to decline. Banks attribute this betterment to better economic conditions and more disciplined financial management among borrowers.
Consumer Sector: A Mixed Bag
The consumer sector also saw gains, albeit more modest.Net profits increased by 6.3%,largely due to improved margins at Alicorp. However, this growth was partially offset by the absence of extraordinary income from InRetail, which had boosted results in previous quarters.
A Rebound in Banking Profits
Castellanos echoed the sentiment of stockbrokers, noting that the banking system has experienced a significant rebound in profits. This recovery is a testament to the resilience of Peru’s financial institutions, which have navigated economic uncertainties and emerged stronger.
Key Takeaways
| Sector | 2024 Q4 Profits | Annual Growth | Key Drivers |
|———————|———————|——————-|———————————————————————————|
| Mining | N/A | N/A | Rising commodity prices, stable operational costs |
| Domestic Demand | S/ 2,638 million | 30% | Strong performance in financial and energy sectors |
| Financial Sector | S/ 1,627 million | 49.0% | Lower provisions for bad debt, improved client payment behavior |
| Consumer Sector | N/A | 6.3% | Improved margins at Alicorp, offset by lack of extraordinary income from InRetail |
Looking Ahead
The Lima stock market’s reliance on mining underscores the importance of global commodity prices. Though, the recent growth in the financial sector and improvements in domestic demand highlight the market’s diversification potential.As Castellanos aptly put it, “The Lima stock market is, in essence, mining, so a good performance of this sector boosts the financial results of the group of listed companies.”
For investors, the key takeaway is clear: while mining remains a critical driver, other sectors are emerging as significant contributors to the market’s growth. As the banking system continues to rebound and consumer companies refine their strategies, the Lima stock market is poised for a dynamic future.
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Stay tuned to gestión for more insights into Peru’s evolving financial landscape.The Peruvian economy has shown signs of recovery in recent quarters, with the PBI registering slight advances. This growth has been reflected in the performance of several firms listed on the BVL,where stricter credit policies have helped reduce provision expenses. However, not all sectors have benefited equally from this economic rebound.
Infrastructure Sector Faces Challenges
While some industries have thrived, the infrastructure sector has struggled. According to Kallpa SAB, the sector’s fourth-quarter profits in 2024 fell by 34%. This decline is attributed to Aenza’s high comparative base, which saw extraordinary margins in its Engineering & Construction (E&C) division during the same period in 2023. Additionally,companies like Ferreycorp and Unacem recorded losses due to exchange rate fluctuations.
Energy Sector Shines
In contrast, the energy sector has experienced a remarkable turnaround.Profits surged by 343.8% in the evaluated period, primarily due to the absence of extraordinary provisions that had previously impacted earnings. This growth highlights the sector’s resilience and adaptability in a challenging economic surroundings.
Key Takeaways
The mixed performance across sectors underscores the uneven nature of Peru’s economic recovery. While the energy sector has capitalized on favorable conditions, the infrastructure sector continues to face headwinds. Below is a summary of the key points:
| sector | Performance | Key Factors |
|——————-|——————————————|———————————————————————————|
| Infrastructure | profits fell by 34% in Q4 2024 | High comparative base for Aenza, exchange rate losses for Ferreycorp and Unacem |
| Energy | Profits increased by 343.8% in Q4 2024 | Absence of extraordinary provisions |
as Peru’s economy continues to evolve, stakeholders will need to monitor these trends closely. The recovery of the PBI offers hope, but sector-specific challenges remain. For more insights into the Peruvian market, explore the latest updates on the BVL.
Renewable Energy Sector Sees Growth Amid Improved Hydrological Conditions and Increased production
The renewable energy sector is experiencing a significant boost, driven by improved hydrological conditions and a rise in non-conventional renewable energy production. According to a recent report by the Sociedad Agente de Bolsa (SAB), energy generators are poised to benefit from these favorable trends, particularly in the last quarter of 2024.
Key Drivers of Growth
- Improved Hydrological Conditions:
The SAB highlighted that better hydrological conditions have played a crucial role in enhancing energy production. This improvement has been particularly beneficial for hydroelectric power plants, which rely heavily on water availability.
- Increased Non-Conventional Renewable Energy Production:
The report also noted a steady annual increase in the production of non-conventional renewable energy, such as solar and wind power. This shift aligns with global trends toward sustainable energy sources and reduced carbon emissions.
Market Impact
The combination of these factors has created a positive outlook for energy generators.Companies like Engie, a major player in the renewable energy sector, are expected to see improved performance compared to previous periods.
| Key Factors | Impact |
|——————————————|—————————————————————————-|
| Improved Hydrological Conditions | Enhanced hydroelectric power production |
| Increased Non-Conventional Energy Output | Growth in solar and wind energy generation |
| Market Performance | Positive outlook for energy generators like Engie |
Expert Insights
Zulema Ramírez Huancayo, an economist and Finance Editor at Diario Gestión, emphasized the importance of these developments. “The renewable energy sector is at a pivotal moment. With better hydrological conditions and increased production of non-conventional energy, we are witnessing a transformation that could redefine the energy landscape,” she stated.
What’s Next?
As the renewable energy sector continues to grow, stakeholders are encouraged to stay informed about the latest trends and opportunities. For exclusive updates and in-depth analysis, subscribe to Diario Gestión’s newsletter here. If you haven’t already, world shifts toward cleaner energy sources, these developments mark a significant step forward in achieving a greener future.
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for more insights on the financial and energy sectors, follow Zulema Ramírez Huancayo on linkedin.
