Teck’s coal business made CAN$215 million before depreciation and amortisation in 2Q15, up from CAN$203 million over the same period in 2014, the company said in its latest results.
Profit for the first six months of the year totaled CAN$510 million, up from CAN497 million in 2014.
These strong results come despite a drop in prices of 14% in 2Q15 to US$95/t, reflecting oversupplied steelmaking coal market conditions and a large drop in spot price assessments. The lower prices were offset by a stronger US dollar and a cost reduction programme that has seen the company reduce its coal unit costs by US$17/t on 2014’s levels.
In 3Q15, the company is implementing three weeks of rotating shutdowns at the company’s coal operations to reduce production of metallurgical coal by about 1.5 million t to 5.7 million t - a reduction of 22% for the quarter. It now expects total annual production of between 25 million t and 26 million t but will consider further production cuts in 4Q15 unless the supply-demand balance improves.
“Our operations have turned in a solid performance for the quarter,” said Don Lindsay, Teck’s President and CEO. “All of our operations have remained cash flow positive after sustaining capital investment and our balance sheet remains strong […] This has been achieved notwithstanding a material drop in the US dollar spot coal price since the beginning of 2015.”
Written by Jonathan Rowland.
Read the article online at: https://www.worldcoal.com/coal/24072015/teck-posts-strong-2q15-results-in-coal-business-2625/