$94M profit declared by Teck Resources, sees change in direction in steelmaking coal and zinc prices

One of Teck Resources' new LNG conversion coal haul trucks being tested in the Elk Valley. — Photo courtesy Teck

Vancouver, BC – Teck Resources Limited has reported profit attributable to shareholders of $94 million ($0.16 per share) compared with $68 million ($0.12 per share) a year ago. Adjusted profit attributable to shareholders was $18 million, or $0.03 per share, compared with $64 million, or $0.11 per share in 2015.

“Again our operations performed well by reducing our costs while maintaining production volumes,” said Don Lindsay, President and CEO. “Notwithstanding that the commodity cycle continues to be challenging, we are encouraged by the change in direction in steelmaking coal and zinc prices.”

Highlights and Significant Items

• Profit attributable to shareholders was $94 million and EBITDA was $517 million in the first quarter.
• Gross profit before depreciation and amortization was $464 million in the first quarter compared with $685 million in the first quarter of 2015.
• Cash flow from operations was $373 million in the first quarter of 2016 compared with $374 million a year ago.
• We have reached agreements with the majority of our steelmaking coal customers for the second quarter of 2016, based on a quarterly benchmark of US$84 per tonne for the highest quality product, and we expect total sales in the second quarter, including spot sales, to be at least 6.5 million tonnes of steelmaking coal. As current spot prices are significantly higher than the quarterly contract price, we expect our realized price for the second quarter to be within 95% of the current quarterly benchmark.
• Construction of the Fort Hills oil sands project is more than 55% complete and progressing substantially on budget and in accordance with the project schedule. As at April 25, our remaining cash funding to complete the project is $1.0 billion.
• Our liquidity remains strong at over $5.1 billion inclusive of $1.3 billion in cash at April 25, 2016 and US$3.0 billion of undrawn, committed credit facilities. Our cash balance is in line with expectations and consistent with our goal of finishing the year with more than $500 million.
• We continue to achieve significant reductions of our cash unit costs at our operations. Steelmaking coal unit costs, including transportation charges, decreased to CAD$77 (US$56) per tonne in the first quarter compared with CAD$85 (US$68) per tonne a year ago, while copper cash unit costs after by-product credits declined to US$1.29 per pound from US$1.53 per pound from a year ago.
• All of our operations were cash positive after sustaining capital and capitalized stripping in the first quarter, with the exception of Pend Oreille.
• In the first quarter of 2016, we achieved a number of production records at our operations.
• Union employees at Antamina ratified a new three-year labour agreement in January and union employees at Coal Mountain ratified a new four-year labour agreement in March.

Download/view Q1 2016 Report for the full text of this release.