Teck Reports Unaudited First Quarter Results for 2024
Press Release
April 24, 2024
Vancouver, B.C. – Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (Teck) today announced its unaudited first quarter results for 2024.
“All outstanding major construction at our QB operation was completed in the first quarter, including the shiploader and molybdenum plant, and we marked the first shipment of concentrate from the completed port facility,” said Jonathan Price, President and CEO. “We had strong first quarter performance across our business, generating $1.7 billion of Adjusted EBITDA1 with steadily increasing quarterly copper production as QB ramp-up advances, and we continued to return cash to shareholders.”
Highlights
- Adjusted EBITDA1 of $1.7 billion in Q1 2024 was driven by strong prices for steelmaking coal and copper, partly offset by lower zinc prices and lower steelmaking coal sales volumes. Profit from continuing operations before taxes was $741 million in Q1 2024.
- Adjusted profit from continuing operations attributable to shareholders1 was $392 million, or $0.76 per share, in Q1 2024. Profit from continuing operations attributable to shareholders was $343 million, $0.66 per share, in Q1 2024.
- Our liquidity as at April 24, 2024 is $7.1 billion, including $1.6 billion of cash. Excluding the payment of income taxes of $1.3 billion, primarily related to prior years that was anticipated, we generated cash flows from operations of $1.4 billion in Q1, ending the first quarter with a cash balance of $1.3 billion.
- We returned a total of $145 million to shareholders in the first quarter through the purchase of $80 million of Class B subordinate voting shares pursuant to our normal course issuer bid, and $65 million paid to shareholders as dividends.
- Copper production increased 74% to 99,000 tonnes in the first quarter, with QB producing 43,300 tonnes. QB production was higher than the fourth quarter of 2023, as the operation continues to ramp-up. Average copper prices were US$3.83 per pound in the first quarter and following quarter end, spot copper prices reached two year highs, trading in excess of US$4.40 per pound.
- At QB, construction was completed and demobilization of the construction workforce was substantially advanced by the end of the quarter. We successfully loaded our first vessel using the shiploader, and the molybdenum plant will be ramped-up in the second quarter of 2024.
- Zinc in concentrate production increased by 10% to 159,800 tonnes in the first quarter, and sales from Red Dog of 84,600 tonnes were within our previously disclosed guidance.
- Our steelmaking coal business unit generated $1.4 billion in gross profit before depreciation and amortization1 in Q1, with sales volumes of 5.9 million tonnes and an average realized steelmaking coal price of US$297 per tonne.
- We closed the sale of the 20% minority interest in Elk Valley Resources (EVR), our steelmaking coal business, to Nippon Steel Corporation (NSC) on January 3, 2024, with NSC exchanging its 2.5% interest in Elkview Operations, paying US$1.3 billion in cash on closing, plus US$0.4 billion to be paid to Teck from EVR cash flows. Also, on January 3, 2024, POSCO exchanged its 2.5% interest in Elkview Operations and its 20% interest in the Greenhills joint venture for a 3% interest in EVR.
Note: 1.This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” for further information.
Financial Summary Q1 2024
| Financial Metrics
(CAD$ in millions, except per share data) |
Q1 2024 | Q1 2023 |
| Revenue | $ 3,988 | $ 3,785 |
| Gross profit | $ 1,289 | $ 1,666 |
| Gross profit before depreciation and amortization1 | $ 1,919 | $ 2,089 |
| Profit from continuing operations before taxes | $ 741 | $ 1,856 |
| Adjusted EBITDA1 | $ 1,693 | $ 1,972 |
| Profit from continuing operations attributable to shareholders | $ 343 | $ 1,166 |
| Adjusted profit from continuing operations attributable to shareholders1 | $ 392 | $ 930 |
| Basic earnings per share from continuing operations | $ 0.66 | $ 2.27 |
| Diluted earnings per share from continuing operations | $ 0.65 | $ 2.23 |
| Adjusted basic earnings per share from continuing operations1 | $ 0.76 | $ 1.81 |
| Adjusted diluted earnings per share from continuing operations1 | $ 0.75 | $ 1.78 |
Note:
1. This is a non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” for further information.
Key Updates
Executing on Our Copper Growth Strategy
- Construction of QB was completed and demobilization of contractors was substantially advanced at the end of the quarter.
- We successfully loaded our first vessel of QB concentrate using the shiploader, and the molybdenum plant will be ramped-up in the second quarter of 2024.
- Our QB2 project capital cost guidance is unchanged at US$8.6–$8.8 billion.
- Copper production at QB was 43,300 tonnes during the first quarter, an increase from the fourth quarter as ramp-up continues. Our previously disclosed annual production and unit cost guidance for QB is unchanged.
- We continued to advance our industry-leading copper growth portfolio, with a focus on completing feasibility studies, advancing detailed engineering work, project execution planning and progressing permitting, particularly at the HVC Mine Life Extension, San Nicolás and Zafranal.
Safety and Sustainability Leadership
- Our High-Potential Incident Frequency rate was 0.06 in the first quarter, lower than the same period in 2023.
- We released our 23rd annual Sustainability Report, outlining Teck’s 2023 sustainability performance, including progress in areas such as decarbonization, diversity and working towards a nature positive future.
- There has been no change to our previously disclosed guidance. Our guidance is outlined in summary below and our usual guidance tables, including three-year production guidance, can be found on pages 25–29.
IBF4
