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Teck Resources reports YoY dip in Q1 profit

Coal News - Published on Wed, 24 Apr 2019

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Teck Resources Limited has reported profit attributable to shareholders of USD 630 million for the first quarter of 2019 compared with CAD 759 million a year ago. Adjusted profit attributable to shareholders was CAD 568 million compared with CAD 753 million a year ago. Mr Don Lindsay, President and CEO, said “Demand for our products remains strong, commodity prices continue to be solid and we were pleased to regain investment grade credit ratings, which confirms our strong financial position. Our previously issued guidance for the year remains unchanged and our main focus for the remainder of the year is the development of our QB2 copper project.”

Highlights and Significant Items

EBITDA was CAD 1.4 billion compared with CAD 1.6 billion in the first quarter of 2018. Our adjusted EBITDA in the first quarter totaled CAD 1.3 billion compared with CAD 1.6 billion last year.

Gross profit was CAD 1.0 billion in the first quarter compared with CAD 1.4 billion a year ago. Gross profit before depreciation and amortization was CAD 1.4 billion compared with CAD 1.7 billion in the first quarter of 2018.

The transaction through which Sumitomo Metal Mining Co Ltd and Sumitomo Corporation subscribed for a 30% indirect interest in Compañia Minera Quebrada Blanca SA, which owns Quebrada Blanca Phase 2, closed on March 29, 2019. On closing of the transaction SMM and SC contributed CAD 1.3 billion to the QB2 project and are expected to contribute a further USD 307 million over the remainder of 2019.

Construction of QB2 was approved by our Board in December 2018 and mobilization is in progress. The current construction workforce is over 1,600 people across the six major construction areas. First production is targeted for the second half of 2021.

As previously announced, in early February we agreed with Posco Canada Limited (Poscan) to substantially increase the royalty paid by Poscan in respect of its 20% share of Greenhills coal production, effective February 11, 2019. At benchmark steelmaking coal prices of approximately USD 200 per tonne, the royalty payment will increase by approximately $90 million annually. At current steelmaking coal prices, the increase in the royalty has increased first quarter revenue by approximately $13 million. The new royalty remains in effect until December 31, 2022.

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Posted By : Rabi Wangkhem on Wed, 24 Apr 2019
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