Teck announces 4Q16 reports

"We had a very good year in 2016. We came through one of the longest and deepest down cycles our industry has faced and emerged as a stronger company," said Don Lindsay, President and CEO. "We set a number of production and sales records while continuing to reduce our costs. We used the significant increase in cash generated by the higher steelmaking coal and zinc prices to reduce our debt by over CAN$1.0 billion in the last few months."

Highlights

Record adjusted profit attributable to shareholders in the fourth quarter of CAN$930 million, or CAN$1.61 per share, compared with CAN$16 million in 2015, or CAN$0.03 per share. Annual adjusted profit attributable to shareholders was CAN$1.1 billion, or CAN$1.91 per share, compared with CAN$188 million in 2015, or CAN$0.33 per share.

Record gross profit before depreciation and amortisation of CAN$2.0 billion in the fourth quarter compared with CAN$614 million in the fourth quarter of 2015. Gross profit before depreciation and amortisation in 2016 was CAN$3.8 billion compared with CAN$2.6 billion in 2015.

Record cash flow from operations of CAN$1.5 billion in the fourth quarter of 2016 compared with CAN$693 million a year ago. Cash flow from operations was CAN$3.1 billion in 2016 compared with CAN$2.0 billion last year.

Profit attributable to shareholders was CAN$697 million in the fourth quarter compared with a loss of CAN$459 million in the fourth quarter of 2015. Annual profit attributable to shareholders was CAN$1.0 billion compared with a loss of CAN$2.5 billion in 2015.

The company has reached agreements with the majority of its steelmaking coal customers for the first quarter of 2017, based on a quarterly benchmark of USCAN$285/t for the highest quality product, and expects total sales in the first quarter, including spot sales, to be approximately 6.0 million t of steelmaking coal.

Unionised employees at the Fording River and Elkview steelmaking coal mines each ratified new five-year collective agreements.

Steelmaking coal spot prices peaked in mid-November, exceeding US$300/t for the third time in the last eight years. Our realised steelmaking coal price in the fourth quarter of US$207/t exceeded the quarterly benchmark price of US$200/t settled in early October, as the spot priced component of our sales reflected the market trend. Tight steelmaking coal supply and increased demand from steel mills during the fourth quarter drove prices up and the quarterly benchmark price for the first quarter of 2017 was settled at US$285/t in mid-December. Steelmaking coal prices have since retreated. Prices on the spot market are more than 45% below the first quarter benchmark price and are currently trading at approximately USCAN$155/t. Despite increased supply from existing producers and a number of mine restarts, spot pricing levels remain nearly double what they were a year ago.

Read the article online at: https://www.worldcoal.com/coal/16022017/teck-announces-4q16-reports/