|
Download/view Q2 2015 Report for the full text of this release.
Excerpt:
Vancouver, BC - Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) ("Teck") reported second quarter adjusted profit attributable to shareholders of $79 million, or $0.14 per share, compared with $72 million or $0.13 per share in 2014. Profit attributable to shareholders was $63 million ($0.11 per share) compared with $80 million ($0.14 per share) a year ago.
"Our operations have turned in a solid performance for the quarter," said Don Lindsay, President and CEO. "All of our operations have remained cash flow positive after sustaining capital investment and our balance sheet remains strong with over $6.5 billion of liquidity. This has been achieved notwithstanding a material drop in the U.S. dollar spot coal price since the beginning of 2015."
Highlights and Significant Items
-
Profit attributable to shareholders was $63 million and EBITDA was $596 million in the second quarter.
-
Gross profit before depreciation and amortization was $676 million in the second quarter compared with $636 million in the second quarter of 2014.
-
Cash flow from operations, before working capital changes, was $531 million in the second quarter of 2015 compared with $520 million a year ago.
-
We have reached agreements with the majority of our customers for the third quarter of 2015, based on a quarterly benchmark of US$93 per tonne for the highest quality product and we expect total sales in the third quarter, including spot sales, to be at least 6.0 million tonnes of steelmaking coal.
-
All critical milestones are being achieved on the Fort Hills oil sands project. The partners are focused on opportunities to manage capital cost in the current economic environment.
-
A falling Canadian dollar, lower oil prices and our cost reduction program have contributed to reduce our U.S. dollar unit costs for our products with copper and coal unit costs falling by US$0.15 per pound and US$17 per tonne, respectively, compared to last year.
-
The Red Dog concentrate shipping season commenced on June 28, with the first vessel sailing. We expect sales of 170,000 tonnes of contained zinc metal in the third quarter and 200,000 tonnes in the fourth quarter reflecting the normal seasonal pattern of Red Dog sales.
-
Our liquidity remains strong at over $6.5 billion inclusive of $1.5 billion cash at July 22, 2015 and US$4.2 billion of undrawn, committed credit facilities. Our cash balance is in line with expectations and consistent with our goal of finishing the year with at least $1.0 billion in cash.
-
On May 28, in response to steelmaking coal market conditions we announced rotating shutdowns totaling three weeks in the third quarter at our steelmaking coal mines. These shutdowns have commenced and further steps to reduce production may be taken in the fourth quarter unless the supply-demand balance in the market improves.
-
On June 25, unexpected ground movement was observed in the area of the SX-EW plant at our Quebrada Blanca Operations in Chile leading to a temporary suspension of cathode production. Partial production has since resumed. Production in the second half of 2015 is expected to be reduced by 5,000 to 10,000 tonnes of copper cathode.
-
As planned, Duck Pond ceased operations on June 30 after exhausting all of its remaining ore resources.
-
On July 9, we increased our cash position by US$162 million as a result of entering into a gold offtake agreement and terminating a separate royalty agreement with subsidiaries of Royal Gold, Inc. related to our Carmen de Andacollo Operation.
-
We were the top-ranked mining company and fourth-ranked company overall named to the Best 50 Corporate Citizens in Canada ranking by media and investment research company Corporate Knights and were also named one of the Top 50 Socially Responsible Corporations in Canada by Sustainalytics, a global responsible investment research firm.
Download/view Q2 2015 Report for the full text of this release.
Cautionary Statement on Forward-Looking Information
This news release contains certain forward-looking information and forward-looking statements as defined in applicable securities laws. All statements other than statements of historical fact are forward-looking statements. These forward-looking statements, principally under the headings "Outlook," that appear in this release but also elsewhere in this document, include estimates, forecasts, and statements as to management's expectations with respect to, among other things, our expectation that we will be able to maintain unit costs, reduce inventories and meet all contracted and committed coal sales during our coal shutdowns, anticipated coal production and sales for the third quarter, the annual coal production forecast, copper production guidance, the anticipated timing and benefits of the Highland Valley crusher relocation project, expectation that Antamina throughput rates will continue above original design capacity rates, expectation that we will receive approval of the Quebrada Blanca SEIA by the end of the third quarter, timing of full production at Pend Oreille, anticipated zinc sales volumes, timing of oil production at Fort Hills, the expectation that our cash and credit lines are sufficient to meet our capital commitments and working capital needs, our ability to manage our capital spending profile, cost and production forecasts at our business units and individual operations, sales volume and selling prices for our products (including settlement of coal contracts with customers), timing of a regulatory approval for the Frontier energy project 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 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 coal and other product inventories, our ability to secure adequate transportation for our products, our ability to obtain permits for our operations and expansions, our ongoing relations with our employees and business partners and joint venturers. 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 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 may be adjusted by our partners.
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 coal sales volumes and average coal prices for the quarter depend on timely arrival of vessels and performance of our 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, 2014, filed under our profile on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov) under cover of Form 40-F.
Teck will host an Investor Conference Call to discuss its Q2/2015 financial results at 11:00 AM Eastern time, 8:00 AM Pacific time, on Thursday, July 23, 2015. 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 Q2 2015 Report for the full text of this release.
|