Teck Logo

Teck Reports Unaudited Third Quarter Results for 2017
October 26, 2017 Download | PDF [1.06 Mb]

Vancouver, B.C. – Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (“Teck”) reported adjusted profit attributable to shareholders of $621 million ($1.08 per share) in the third quarter compared with $152 million ($0.26 per share) a year ago.

“We are very pleased with our performance in the third quarter,” said Don Lindsay, President and CEO. “We achieved strong operating results with our second highest quarterly sales for steelmaking coal and record zinc production at Antamina for the second consecutive quarter. With these strong operating results and favourable prices, our adjusted EBITDA was $1.4 billion, just over $700 million higher than in the third quarter of last year.”

Highlights and Significant Items 

  • Adjusted profit was $621 million ($1.08 per share) in the third quarter compared with $152 million ($0.26 per share) in the third quarter of last year. Profit attributable to shareholders was $600 million ($1.04 per share) in the third quarter compared with $234 million ($0.41 per share) a year ago. 
  • Adjusted EBITDA for the 12 months ended September 30, 2017 was $6.1 billion, which was $153 million higher than our previous twelve-month record of approximately $5.9 billion set in 2011.
  • EBITDA was $1.4 billion in the third quarter compared with $804 million in the third quarter of 2016. Our adjusted EBITDA in the third quarter totaled $1.4 billion compared with $696 million last year. 
  • Gross profit was $1.1 billion in the third quarter compared with $452 million a year ago. Gross profit before depreciation and amortization was $1.5 billion in the third quarter compared with $817 million in the third quarter of 2016.
  • We achieved record total material movement at our steelmaking coal business unit, moving over 79 million bank cubic meters (BCM’s) in the quarter. Third quarter steelmaking coal sales reached 7.54 million tonnes, our second highest quarterly sales on record. We expect our steelmaking coal sales to be approximately 6.5 million tonnes in the fourth quarter.
  • Antamina achieved record zinc production for the second consecutive quarter of 102,300 tonnes.
  • Construction progress on the Fort Hills oil sands project has surpassed 96%. In order to accelerate commissioning, the Fort Hills plant initiated froth production in the quarter, which required operating the mine, ore preparation, primary extraction tailings and utilities areas.
  • In September, we announced an increase in our zinc production guidance for our Red Dog operation. Red Dog’s zinc production for 2017 is now expected to be in the range of 525,000 to 550,000 tonnes, up from the prior guidance range of 475,000 to 500,000 tonnes. 
  • The Red Dog concentrate shipping season is expected to be completed in the first week of November. We expect to ship approximately 1.0 million tonnes of zinc concentrate and 210,000 tonnes of lead concentrate representing all of the concentrate available to be shipped from the operation.
  • In early October, we received approval to make a normal course issuer bid to purchase our Class B subordinate voting shares (Class B shares). We may purchase up to 20 million Class B shares during the period starting October 10, 2017 and ending October 9, 2018.
  • For the eighth straight year, we have been named to the Dow Jones Sustainability World Index (DJSI), indicating that our sustainability practices are in the top 10% of the 2,500 largest companies in the S&P Global Broad Market Index (BMI).
  • Our liquidity remains strong at approximately $4.9 billion, including US$3.0 billion of undrawn, committed credit facilities and over $1.0 billion of cash at October 25, 2017.

Download/view Q3 2017 Report for the full text of this release.

CAUTIONARY STATEMENT ON FORWARD-LOOKING STATEMENTS

This news release contains certain forward-looking information and forward-looking statements as defined in applicable securities laws (collectively referred to in this news release as “forward-looking statements”). All statements other than statements of historical fact are forward-looking statements. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of Teck to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. These forward-looking statements, including under the headings “Outlook,” that appear in various places in this release, include estimates, forecasts, and statements as to management’s expectations with respect to, among other things, the amount of zinc and lead concentrates we expect to ship from Red Dog, our fourth quarter coal sales projections, timing of first oil from Fort Hills, our expectation that our coal operations will be able to make up production and material movement shortfalls, coal production guidance, coal unit cost guidance, coal transportation cost guidance, expectations regarding our coal product mix, Elk Valley Water Quality Plan spending guidance, including projected capital spending and 2017 spending, timing of Fording River water treatment plant, expectations regarding the additional treatment steps associated with the water quality plan and related benefits, the additional ball mill project at Highland Valley, Quebrada Blanca Phase 2 mine life and production capacity projections, copper production guidance, copper unit cost guidance, Highland Valley molybdenum production guidance, Red Dog and total zinc production guidance, Red Dog and zinc sales guidance, expected costs and benefits of the Red Dog mill upgrade project, silver production guidance, the expected timing and amount of production at the Fort Hills oil sands project, total Fort Hills project capital costs, the expected amount and timing of Teck’s share of costs, timing of Fort Hills secondary extraction units and production reaching 90% of capacity, benefits of Fort Hills paraffinic froth treatment process, the impact of currency exchange rates, and demand and market outlook for commodities. These forward-looking statements involve numerous assumptions, risks and uncertainties and actual results may vary materially.

These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general business and economic conditions, the supply and demand for, deliveries of, and the level and volatility of prices of, zinc, copper and steelmaking coal and other primary metals and minerals as well as oil, and related products, the timing of the receipt of regulatory and governmental approvals for our development projects and other operations, our costs of production and production and productivity levels, as well as those of our competitors, power prices, continuing availability of water and power resources for our operations, market competition, the accuracy of our reserve estimates (including with respect to size, grade and recoverability) and the geological, operational and price assumptions on which these are based, conditions in financial markets, the future financial performance of the company, our ability to attract and retain skilled staff, our ability to procure equipment and operating supplies, positive results from the studies on our expansion projects, our steelmaking coal and other product inventories, our ability to secure adequate transportation for our products, our ability to obtain permits for our operations and expansions, and our ongoing relations with our employees and business partners and joint venturers. Assumptions regarding the Elk Valley Water Quality Plan include assumption that additional treatment will be effective at scale, and that the technology and facilities operate as expected. Assumptions regarding Quebrada Blanca Phase 2 are based on current project assumptions and the final feasibility study. Assumptions regarding Fort Hills are based on the approved project development plan and the assumption that the project will be developed and operated in accordance with that plan, assumptions regarding the performance of the plant and other facilities at Fort Hills and the operation of the project, as well as the assumption that the future funding discussions will not impact the plan to achieve first oil by the end of 2017. Assumptions regarding the impact of foreign exchange are based on current commodity prices. The foregoing list of assumptions is not exhaustive. Events or circumstances could cause actual results to vary materially.

Factors that may cause actual results to vary materially include, but are not limited to, changes in commodity and power prices, changes in market demand for our products, changes in interest and currency exchange rates, acts of foreign governments and the outcome of legal proceedings, inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, adverse weather conditions and unanticipated events related to health, safety and environmental matters), union labour disputes, political risk, social unrest, failure of customers or counterparties (including logistics suppliers) to perform their contractual obligations, changes in our credit ratings, unanticipated increases in costs to construct our development projects, difficulty in obtaining permits, inability to address concerns regarding permits of environmental impact assessments, and changes or further deterioration in general economic conditions. Our Fort Hills project is not controlled by us and construction and production schedules and costs may be adjusted by our partners, and timing of spending and construction is not in our control. 

Statements concerning future production costs or volumes are based on numerous assumptions of management regarding operating matters and on assumptions that demand for products develops as anticipated, that customers and other counterparties perform their contractual obligations, that operating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts and supplies, labour disturbances, interruption in transportation or utilities, adverse weather conditions, and that there are no material unanticipated variations in the cost of energy or supplies. Statements regarding anticipated steelmaking coal sales volumes and average steelmaking coal prices depend on timely arrival of vessels and performance of our steelmaking coal-loading facilities, as well as the level of spot pricing sales.

We assume no obligation to update forward-looking statements except as required under securities laws. Further information concerning risks and uncertainties associated with these forward-looking statements and our business can be found in our Annual Information Form for the year ended December 31, 2016, filed under our profile on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov) under cover of Form 40-F, as well as subsequent filings.

Webcast

Teck will host an Investor Conference Call to discuss its Q3/2017 financial results at 11:00 AM Eastern time, 8:00 AM Pacific time, on Thursday, October 26, 2017. A live audio webcast of the conference call, together with supporting presentation slides, will be available at our website at www.teck.com. The webcast will be archived at www.teck.com

Download/view Q3 2017 Report for the full text of this release.

Investor Contact:
Fraser Phillips
Senior Vice President, Investor Relations & Strategic Analysis
604.699.4621
fraser.phillips@teck.com

Media Contact: 
Marcia Smith
Senior Vice President, Sustainability and External Affairs
604.699.4616
marcia.smith@teck.com

17-42-TR

Tags

Teck Logo

Teck is a diversified resource company committed to responsible mining and mineral development with business units focused on copper, zinc, steelmaking coal and energy.