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Teck reports unaudited 2Q21 results

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World Coal,


Teck Resources Limited has announced its unaudited 2Q21 results.

“Solid performance at our operations and key projects against the backdrop of improving market conditions made for a very positive second quarter of 2021, with adjusted profit up 281% compared to the same period last year,” said Don Lindsay, President and CEO. “We managed through the most acute COVID-19 conditions in Chile since the start of the pandemic while safely achieving our best quarterly progress to date on our flagship QB2 copper growth project. The COVID-19 situation in Chile has improved in recent weeks and vaccination rates at QB2 are high, which is contributing to strong momentum on the project heading into the third quarter. Our Neptune port upgrade project is operational and ramping up to full capacity, and the new facility is being integrated into our logistics chain, which will reduce costs, enhance flexibility and improve performance.”

Highlights

  • Adjusted EBITDA1 of CAN$989 million in 2Q21, an increase of 104% compared to the same period last year.
  • Adjusted profit attributable to shareholders of CAN$339 million or CAN$0.64 per share in 2Q21, an increase of 281% compared to the same period last year. Profit attributable to shareholders was CAN$260 million, or CAN$0.49 per share in 2Q21.
  • Despite the largest COVID-19 wave to date in Chile, the construction of the company’s QB2 project continued to advance with the best quarterly progress to date.
  • The financial results are significantly improved compared to the same period last year supported by the positive market backdrop of improved commodity prices, production in line with plan across the company’s business units and sales meeting its 2Q21 guidance.
  • Teck’s copper business unit had a strong 2Q21 with a 198% increase in gross profit before depreciation and amortisation compared to the same period last year, supported by an average realised copper price of US$4.39/lb and copper production of 72 100 t, in line with plan.
  • Teck’s zinc business unit had a strong 2Q21 operating performance with an increase in zinc production at its Red Dog Operations of 67% compared to the same period last year, resulting in an increase to the company’s 2021 annual zinc in concentrate production guidance range.
  • Sales of steelmaking coal were 6.2 million t in 2Q21, with approximately 2 million t sold to China at significantly higher prices than FOB Australia prices. The FOB Australia and CFR China price assessments increased sharply in the latter half of 2Q21, the impact of which will be reflected in the company’s 3Q21 financial performance.
  • Liquidity of CAN$6.1 billion as at 26 July 2021.
  • The company was named to the Best 50 Corporate Citizens in Canada ranking as one of the top 50 companies in Canada for corporate citizenship for the 15th consecutive year.

Key updates

Executing on the company’s copper growth strategy – QB2 a long-life, low-cost operation with major expansion potential.

  • Despite 2Q21 seeing the largest COVID-19 wave to date in Chile, construction continued to advance with the best quarterly progress to date; As COVID-19 cases in Chile started declining in June 2021, and coupled with the country’s high rates of vaccination, the company is aggressively ramping-up to peak workforce levels.
  • Overall project progress of 60% is expected in early August.
  • First production continues to be expected in 2H22.
  • The capital cost estimate remains unchanged at US$5.2 billion before COVID-19 related capital costs.
  • Assuming that Teck’s COVID-19 management plan progresses in accordance with its expectations, COVID-19 related capital costs are now expected to be approximately US$600 million.

Neptune Bulk Terminals

Securing a low-cost reliable supply chain for the company’s steelmaking coal business unit.

  • The company’s Neptune port upgrade project is in the site wide ramp-up phase, which continues as planned.

Guidance

  • Teck’s previously issued 2021 annual guidance has been updated for changes to zinc, refined zinc, steelmaking coal and bitumen production, zinc net cash unit costs, steelmaking coal transportation costs, bitumen adjusted operating costs and steelmaking coal growth capital and capitalised stripping expenditures.

Read the article online at: https://www.worldcoal.com/mining/27072021/teck-reports-unaudited-2q21-results/

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