Teck Reports Unaudited Third Quarter Results for 2023
Press Release
October 23, 2023
Vancouver, B.C. – Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (Teck) today announced its unaudited third quarter results for 2023.
“We made solid progress on the ramp-up of our flagship QB2 copper project, generating gross profit in the third quarter, and we remain on track to achieve design throughput by year end,” said Jonathan Price, CEO. “Positive financial performance was driven by continued strong commodity prices, partially offset by lower steelmaking coal sales due to supply chain disruptions – resulting from the B.C. port strike and wildfires – in the quarter.”
Highlights
- Adjusted profit attributable to shareholders1 of $399 million, or $0.77 per share, in Q3 2023.
- Profit from continuing operations attributable to shareholders of $276 million, or $0.53 per share, in Q3 2023.
- Adjusted EBITDA1 was $1.2 billion in Q3 2023, driven by robust prices for copper and steelmaking coal and higher base metals sales volumes. Profit from continuing operations before taxes was $589 million in Q3 2023.
- Sales volumes in our copper and zinc business units were higher than the same period last year. QB2 continued to ramp-up operations with production of 18,300 tonnes of copper and sales of 14,300 tonnes generating gross profit before depreciation and amortization1 of $19 million in the third quarter.
- The QB2 plant is performing well and we continue to expect to achieve design throughput at QB2 by the end of 2023.
- Steelmaking coal prices remain robust, driven by supply constraints and strong demand, particularly from India and China. Prices rose through the third quarter and into October, with FOB premium spot prices trading at US$343 per tonne as of October 23, 2023. Our high-margin steelmaking coal business unit is well positioned to continue to deliver strong financial performance in the fourth quarter
- We generated cash flows from operations of $736 million, ending the quarter with a cash balance of $1.3 billion.
- Our liquidity as at October 23, 2023 is $7.0 billion, including $1.5 billion of cash.
- We continue to advance our copper growth portfolio. In the third quarter, we completed the feasibility study for our HVC 2040 project and submitted the Project Environmental Assessment to the Environmental Assessment Office of British Columbia in October 2023.
Note:
1. This is a Non-GAAP financial measure or ratio. See “Use of Non-GAAP Financial Measures and Ratios” for further information.
Financial Summary Q3 2023
| Financial Metrics (CAD$ in millions, except per share data) |
Q3 2023
|
Q3 2022 |
||||||
| Revenue | $3,599 | $4,260 | ||||||
| Gross profit | $831 | $1,797 | ||||||
| Gross profit before depreciation and amortization1 | $1,360 | $2,255 | ||||||
| Profit from continuing operations before taxes | $589 | $1,081 | ||||||
| Adjusted EBITDA1 | $1,213 | $1,901 | ||||||
| Profit from continuing operations attributable to shareholders | $276 | $741 | ||||||
| Adjusted profit attributable to shareholders1 | $399 | $923 | ||||||
| Basic earnings per share from continuing operations | $0.53 | $1.42 | ||||||
| Diluted earnings per share from continuing operations | $0.52 | $1.40 | ||||||
| Adjusted basic earnings per share1 | $0.77 | $1.77 | ||||||
| Adjusted diluted earnings per share1 | $0.76 | $1.74 | ||||||
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 – QB2 a long-life, low-cost operation with major expansion potential
- QB2 generated gross profit before depreciation and amortization1 of $19 million in the third quarter.
- Line 2 fully commissioned at the end of September, benefiting from the learnings from Line 1 commissioning with a faster, more effective ramp-up schedule.
- At the end of the third quarter the plant has been operating consistently at 70% of design capacity. We expect to be operating at design throughput and recovery rates by year end, although we expect to be at the lower end of our 2023 annual production guidance for QB2.
- Construction completion of the molybdenum plant is now expected by the end of the fourth quarter of 2023 and the port offshore facilities completion is expected in the first quarter of 2024. Existing shipping arrangements are expected to provide adequate capacity for shipping product though the first quarter of 2024.
- Delays in construction of the molybdenum plant and port offshore facilities, slower than planned demobilization progress and contract claims risk have put pressure on our capital cost guidance. As a result, we have updated our capital cost guidance for QB2 to US$8.6 to US$8.8 billion from our previously disclosed guidance of US$8.0 to US$8.2 billion. Significant efforts are ongoing to mitigate the risks and cost pressures.
IBF4
