Vancouver, B.C. – Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (“Teck”) reported profit attributable to shareholders of $577 million ($1.00 per share) in the second quarter compared with $15 million ($0.03 per share) a year ago.

“I’m pleased with our results,” said Don Lindsay, President and CEO. “We generated adjusted EBITDA of $1.3 billion in the second quarter and $5.4 billion over the last twelve months. After a challenging first quarter we set second quarter steelmaking coal sales and production records of 6.9 and 6.8 million tonnes, respectively, and we reduced our outstanding notes to US$4.8 billion, achieving our target of less than US$5 billion.”

Highlights and Significant Items 

• Profit attributable to shareholders was $577 million and EBITDA was $1.3 billion in the second quarter. 
• Gross profit was $1.1 billion in the second quarter compared with $212 million a year ago. Gross profit before depreciation and amortization was $1.4 billion in the second quarter compared with $536 million in the second quarter of 2016.
• Cash flow from operations was $1.4 billion in the second quarter of 2017 compared with $339 million a year ago.
• We set new second quarter records for both steelmaking coal sales and production of 6.9 and 6.8 million tonnes, respectively. In addition, Antamina achieved record zinc production of 102,300 tonnes in the second quarter. 
• Steel mills, and the majority of steelmaking coal producers, agreed upon an index-linked pricing mechanism, effective April 1, 2017, based on the average of key premium steelmaking coal spot price assessments to replace the negotiated quarterly benchmark.
• In April we announced a new dividend policy and the doubling of our annualized base dividend to $0.20 per share, which is expected to be declared at $0.05 per quarter. We intend to consider declaring a supplemental dividend in the fourth quarter of each year, which will take into consideration our outlook, business considerations and capital requirements. 
• In May, we announced the sale of our two-thirds interest in the Waneta Dam and related transmission assets to Fortis Inc. (Fortis) for $1.2 billion cash. BC Hydro has a right of first offer in respect of the transaction. We expect to realize a pre-tax gain of approximately $800 million on the transaction, which we do not expect to close before the fourth quarter of this year.
• In May and June we repurchased US$260 million principal amount of our outstanding notes by way of make-whole redemptions and open market repurchases, reducing the balance of our outstanding notes to US$4.8 billion. We recorded a CAD$38 million pre-tax charge on the transaction.
• In late June, we acquired the 21% minority interest in the San Nicolás project located in Zacatecas, Mexico for US$50 million. On completion of the transaction, expected before the end of the year, we will own 100% of the project.
• In early July, the employees at Cardinal River ratified a new five-year collective agreement. With this agreement in place, all of the unionized employees within the steelmaking coal business unit are under contract until at least May 31, 2019. Negotiations are ongoing at Highland Valley Copper and a mediated settlement for a new five-year collective agreement is currently in the voting process for unionized employees at Trail Operations. 
• Construction progress on the Fort Hills oil sands project has surpassed 92%. Mobilization for operation has begun and the project remains on track to produce first oil in late 2017. 
• We expect our steelmaking coal sales to reach at least 7.0 million tonnes in the third quarter.
• We were named to the Best 50 Corporate Citizens in Canada for the fifth consecutive year by media and investment research company Corporate Knights. 
• Our liquidity remains strong at over $4.5 billion, including US$3.0 billion of undrawn, committed credit facilities and $930 million of cash at July 26, 2017, net of US$145 million of refunds to customers related to provisional steelmaking coal pricing payments.

Download/view Q2 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, anticipated cost and production forecasts at our business units and individual operations and expectation that we will meet our production guidance, sales volume and selling prices for our products (including settlement of steelmaking coal contracts with customers), our expectations regarding future dividends, the timing of the closing of the Waneta Dam sale, expectation that coal production will improve in the second half of the year, the expectation that our realized price for premium steelmaking coal under the evolving index-linked pricing system will be similar to our historical relationship to the quarterly benchmark, anticipation of recovery in shortfall in coal waste volumes, expectation that copper production will increase in the second half of the year, plans and expectations for our development projects, expectation that grades at Highland Valley Copper will improve, expected production capacity of Quebrada Blanca Phase 2, goal of surfacing value through our Project Satellite initiative, the impact of currency exchange rates, 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, the expectation that the Fort Hills plan to achieve first oil by the end of 2017 will not be affected by the disagreement among the Fort Hills partners regarding future funding, the timing of completion and commissioning of the secondary extraction units, the expected timing of achieving 90% of the expected production rate 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, our ongoing relations with our employees and business partners and joint venturers, and an assumption that no strike will take place at our Highland Valley Copper or Trail Operations. 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. A strike or lockout at our Highland Valley Copper or Trail Operations may cause our copper or zinc production to vary from our projections. 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 for the second quarter 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.

Webcast

Teck will host an Investor Conference Call to discuss its Q2/2017 financial results at 11:00 AM Eastern time, 8:00 AM Pacific time, on Thursday, July 27, 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 Q2 2017 Report for the full text of this release.

Investor Contact:
Fraser Phillips
Senior Vice President, Investor Relations & Strategic Analysis
604.699.4621
[email protected]
 

Media Contact: 
Marcia Smith
Senior Vice President, Sustainability and External Affairs
604.699.4616
[email protected]

Original Article: http://www.teck.com/news/news-releases/2017/teck-reports-unaudited-second-quarter-results-for-2017-