Freeport-McMoRan Inc. (NYSE:FCX)

The financial data reveals several key trends in the company's operating performance and capital management over the period from 2020 to 2024.

Net Operating Profit After Taxes (NOPAT)

The NOPAT exhibited significant fluctuation. It surged from $1,698 million in 2020 to $6,188 million in 2021, indicating a strong improvement in operating profitability. However, this was followed by a decline to $5,116 million in 2022 and a further gradual decrease to $4,538 million by 2024. Despite the reduction from the 2021 peak, the NOPAT remained significantly above the 2020 level.

Invested Capital

Invested capital showed a steady upward trend from $32,173 million in 2020 to a peak of $36,035 million in 2022. Subsequently, it decreased to $33,889 million in 2024. This pattern suggests an initial phase of capital expansion followed by a moderate reduction or reallocation of invested assets.

Return on Invested Capital (ROIC)

The ROIC reflected the variations in both operating profit and invested capital. It increased sharply from 5.28% in 2020 to a high of 17.66% in 2021, paralleling the NOPAT surge. In the following years, ROIC declined to 13.39% by 2024, yet it stabilized above 13%, remaining well above the 2020 figure. This indicates that although profitability decreased from its peak, the company maintained improved efficiency in generating returns from invested capital compared to the initial period.

Overall, the data indicates a period of rapid profitability growth and capital investment up to 2021, followed by a phase of moderate decline and stabilization in operating performance and capital allocation efficiency. The company managed to sustain a higher level of return on invested capital in later years despite a reduction in absolute operating profit and invested capital.

The analysis of the annual financial ratios reveals several noteworthy trends over the five-year period.

Operating Profit Margin (OPM)

The operating profit margin showed a significant increase from 17.35% in 2020 to a peak of 36.59% in 2021. Following this peak, the margin gradually declined over the next three years, settling at 28.4% in 2024. Despite this decline, the margin in 2024 remains considerably higher than the value observed in 2020, indicating improved operational efficiency compared to the initial year.

Turnover of Capital (TO)

The turnover of capital ratio exhibited a consistent upward trend, increasing from 0.44 in 2020 to 0.75 in 2024. This suggests enhanced utilization of capital assets to generate revenue, reflecting improved asset management and operational effectiveness over time.

1 – Effective Cash Tax Rate (CTR)

The measure representing one minus the effective cash tax rate experienced minor fluctuations but showed an overall decline from 68.69% in 2020 to 62.94% in 2024. This decline implies an increase in the effective cash tax rate over the period, which may impact cash flow available to the company.

Return on Invested Capital (ROIC)

The return on invested capital rose sharply from 5.28% in 2020 to 17.66% in 2021, mirroring the trend seen in operating profit margin. Subsequently, the ROIC declined over the following years, stabilizing around 13.39% in 2024. Despite the decrease from its peak, the ROIC in recent years remains significantly higher than the initial value, indicating improved profitability on invested capital.

In summary, the company demonstrated notable improvements in operational efficiency and capital utilization from 2020 to 2021, followed by a period of stabilization with some decline in profitability indicators. The increase in effective cash tax rates could be a factor affecting net returns. Overall, the data reflects a strengthening performance compared to the base year, though with some moderation after peak values were reached.

The financial data reflects the company’s performance over a five-year period, showing notable fluctuations and some stabilizing trends in key metrics.

Net Operating Profit Before Taxes (NOPBT)

The NOPBT experienced a significant increase from 2020 to 2021, rising from 2,472 million US dollars to 8,405 million US dollars. Following this peak, it declined in 2022 and 2023 to 7,205 million and 6,641 million US dollars respectively, before recovering slightly to 7,210 million US dollars in 2024. This pattern indicates an initial strong growth in profitability followed by a reduction and subsequent stabilization at a level higher than the starting point.

Adjusted Revenues

Adjusted revenues consistently increased throughout the entire period. Starting at 14,251 million US dollars in 2020, the revenues grew sharply to 22,971 million in 2021, then slightly decreased to 22,665 million in 2022, before rising again to 22,940 million and 25,385 million in 2023 and 2024 respectively. Despite minor fluctuations, the overall revenue trend shows solid growth, suggesting effective sales or pricing strategies.

Operating Profit Margin (OPM)

The operating profit margin followed a different trajectory. It surged from 17.35% in 2020 to a high of 36.59% in 2021, indicating a substantial improvement in operational efficiency or cost management that year. After this peak, the margin declined each year to 31.79% in 2022, 28.95% in 2023, and further to 28.4% in 2024. Despite the decline, the margin remains significantly higher than the 2020 baseline, implying sustained better profitability relative to revenue.

In summary, the company demonstrated strong revenue growth alongside a sharp increase in profitability in 2021. Though profitability metrics declined somewhat after 2021, both operating profit and operating margin stabilized at levels higher than those observed in 2020. This suggests that while initial gains may have been difficult to maintain at peak levels, the company succeeded in sustaining improved performance compared to the start of the period.

The financial data reveals distinct trends in revenues, invested capital, and capital turnover over the five-year period from 2020 to 2024.

Adjusted Revenues

Adjusted revenues exhibit a strong upward trend overall, increasing from US$14,251 million in 2020 to US$25,385 million in 2024. After a significant jump between 2020 and 2021 (approximately 61% increase), revenues remained relatively stable in 2022 and 2023 before increasing again in 2024. This pattern suggests a phase of rapid growth followed by stabilization and renewed growth.

Invested Capital

Invested capital showed a moderate increase from US$32,173 million in 2020 to a peak of US$36,035 million in 2022. Subsequently, it trended downward to US$33,889 million in 2024. This indicates an initial phase of increased investment followed by capital reductions or divestments in the later years, potentially reflecting efficiency improvements or shifts in capital allocation strategy.

Turnover of Capital (TO)

The turnover ratio improved markedly from 0.44 in 2020 to 0.75 in 2024, showing enhanced efficiency in utilizing invested capital to generate revenues. After initial improvements in 2021 and a slight dip in 2022, the ratio steadily increased through 2023 and 2024, indicating better asset utilization and operational performance.

Overall, the data points to a company that has achieved substantial revenue growth while managing invested capital carefully. The improving capital turnover ratio underscores growing efficiency in capital use. The combination of these trends suggests strengthening operational effectiveness and a positive financial outlook over the observed period.

The financial data reflects significant variations in key operational and tax-related metrics over the five-year period ending December 31, 2024.

Cash Operating Taxes

Cash operating taxes increased substantially from 774 million US dollars in 2020 to 2,672 million US dollars in 2024, representing a more than threefold rise over the period. This increase was particularly pronounced between 2020 and 2021, where taxes nearly tripled from 774 million to 2,217 million US dollars. Subsequent years showed some fluctuations, with a slight decrease in 2023 before rising again in 2024.

Net Operating Profit Before Taxes (NOPBT)

The net operating profit before taxes experienced significant growth from 2,472 million US dollars in 2020 to a peak of 8,405 million US dollars in 2021. After this peak, there was a decline in both 2022 and 2023 to 7,205 million and 6,641 million US dollars respectively. By 2024, NOPBT showed a modest recovery, increasing to 7,210 million US dollars. Despite the fluctuations, the overall trend compared to 2020 remained strongly positive.

Effective Cash Tax Rate (CTR)

The effective cash tax rate exhibited a generally increasing trend over the period. Starting at 31.31% in 2020, the rate decreased to its lowest point of 26.38% in 2021 amid the peak profit year. Thereafter, the rate climbed steadily: 28.99% in 2022, 30.26% in 2023, and reaching 37.06% in 2024, the highest rate recorded in this period. This rising trend in the tax rate in the later years suggests either changes in tax regulations, tax planning adjustments, or shifts in the composition of taxable income.

In summary, the data indicates a strong growth phase in operating profits initially, followed by stabilization at a high level, while cash operating taxes increased markedly. The effective tax rate moved inversely to profits initially but has increased beyond the initial 2020 level by the end of the period, impacting overall tax expenses. These dynamics suggest evolving tax strategies or external tax environment changes affecting the company's tax obligations over time.