VANCOUVER, British Columbia, July 27, 2021 (GLOBE NEWSWIRE) — Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (“Teck”) today announced its unaudited second quarter results for 2021.
“Solid performance at our operations and key projects against the backdrop of improving market conditions made for a very positive second quarter of 2021, with adjusted profit up 281% compared to the same period last year,” said Don Lindsay, President and CEO. “We managed through the most acute COVID-19 conditions in Chile since the start of the pandemic while safely achieving our best quarterly progress to date on our flagship QB2 copper growth project. The COVID-19 situation in Chile has improved in recent weeks and vaccination rates at QB2 are high, which is contributing to strong momentum on the project heading into the third quarter. Our Neptune port upgrade project is operational and ramping up to full capacity, and the new facility is being integrated into our logistics chain, which will reduce costs, enhance flexibility and improve performance.”
- Adjusted EBITDA1 of $989 million in Q2 2021, an increase of 104% compared to the same period last year.
- Adjusted profit attributable to shareholders1 of $339 million or $0.64 per share in Q2 2021, an increase of 281% compared to the same period last year. Profit attributable to shareholders was $260 million, or $0.49 per share in Q2 2021.
- Despite the largest COVID-19 wave to date in Chile, the construction of our QB2 project continued to advance with the best quarterly progress to date.
- Our financial results are significantly improved compared to the same period last year supported by the positive market backdrop of improved commodity prices, production in line with plan across our business units and sales meeting our Q2 2021 guidance.
- Our copper business unit had a strong Q2 2021 with a 198% increase in gross profit before depreciation and amortization1 compared to the same period last year, supported by an average realized copper price of US$4.39 per pound and copper production of 72,100 tonnes, in line with plan.
- Our zinc business unit had a strong Q2 2021 operating performance with an increase in zinc production at our Red Dog Operations of 67% compared to the same period last year, resulting in an increase to our 2021 annual zinc in concentrate production guidance range.
- Sales of steelmaking coal were 6.2 million tonnes in Q2 2021, with approximately 2 million tonnes sold to China at significantly higher prices than FOB Australia prices. The FOB Australia and CFR China price assessments increased sharply in the latter half of Q2, the impact of which will be reflected in our Q3 financial performance.
- Liquidity of $6.1 billion as at July 26, 2021.
- We were named to the Best 50 Corporate Citizens in Canada ranking as one of the top 50 companies in Canada for corporate citizenship for the 15th consecutive year.
1. Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section below for further information and reconciliation.
Financial Summary Q2 2021
(CAD$ in millions, except per share data)
|Q2 2021||Q2 2020|
|Gross profit before depreciation and amortization1||$||1,059||$||453|
|Profit (loss) attributable to shareholders||$||260||$||(149||)|
|Adjusted profit attributable to shareholders1||$||339||$||89|
|Basic earnings (loss) per share||$||0.49||$||(0.28||)|
|Diluted earnings (loss) per share||$||0.48||$||(0.28||)|
|Adjusted basic earnings per share1||$||0.64||$||0.17|
|Adjusted diluted earnings per share1||$||0.63||$||0.17|
- Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section below for further information and reconciliation.
Executing on our copper growth strategy – QB2 a long-life, low-cost operation with major expansion potential
- Despite Q2 2021 seeing the largest COVID-19 wave to date in Chile, construction continued to advance with the best quarterly progress to date;
- As COVID-19 cases in Chile started declining in June 2021, and coupled with the country’s high rates of vaccination, we are aggressively ramping-up to peak workforce levels;
- Overall project progress of 60% is expected in early August;
- First production continues to be expected in the second half of 2022;
- The capital cost estimate remains unchanged at US$5.2 billion before COVID-19 related capital costs; and
- Assuming that our COVID-19 management plan progresses in accordance with our expectations, COVID-19 related capital costs are now expected to be approximately US$600 million.
- Click here for a photo gallery and click here for a video of construction progress on QB2.
Neptune Bulk Terminals – securing a low-cost reliable supply chain for our steelmaking coal business unit
- Our Neptune port upgrade project is in the site wide ramp-up phase, which continues as planned.
- Click here for a photo gallery of progress on the Neptune port upgrade project.
- Our previously issued 2021 annual guidance, outlined in summary below, has been updated for changes to zinc, refined zinc, steelmaking coal and bitumen production, zinc net cash unit costs, steelmaking coal transportation costs, bitumen adjusted operating costs and steelmaking coal growth capital and capitalized stripping expenditures.
- Our usual guidance tables, including three-year production guidance, can be found on pages 28 — 32 of Teck’s full second quarter results for 2021 at the link below.
|2021 Guidance – Summary|
|Copper (000’s tonnes)||275 – 290|
|Zinc (000’s tonnes)||605 – 630|
|Refined zinc (000’s tonnes)||290 – 300|
|Steelmaking coal (million tonnes)||25 – 26|
|Bitumen (million barrels)||6.6 – 8.1|
|Sales Guidance – Q3 2021|
|Red Dog zinc in concentrate sales (000’s tonnes)||180 – 200|
|Steelmaking coal sales (million tonnes)||5.7 – 6.1|
|Unit Cost Guidance|
|Copper net cash unit costs (US$/lb.)||$ 1.30 – 1.40|
|Zinc net cash unit costs (US$/lb.)||$ 0.35 – 0.40|
|Steelmaking coal adjusted site cash cost of sales (CAD$/tonne)||$ 59 – 64|
|Steelmaking coal transportation costs (CAD$/tonne)||$ 39 – 42|
|Bitumen adjusted operating costs (CAD$/barrel)||$ 40 – 44|
Click here to view Teck’s full second quarter results for 2021.
Teck will host an Investor Conference Call to discuss its Q2/2021 financial results at 11:00 AM Eastern time, 8:00 AM Pacific time, on Tuesday, July 27, 2021. 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
Fraser Phillips, Senior Vice President, Investor Relations and Strategic Analysis: 604.699.4621
Marcia Smith, Senior Vice President, Sustainability and External Affairs: 604.699.4616
USE OF NON-GAAP FINANCIAL MEASURES
Our financial results are prepared in accordance with International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. This document refers to a number of Non-GAAP Financial Measures which are not measures recognized under IFRS and do not have a standardized meaning prescribed by IFRS or Generally Accepted Accounting Principles (GAAP) in the United States.
The Non-GAAP Measures described below do not have standardized meanings under IFRS, may differ from those used by other issuers, and may not be comparable to such measures as reported by others. These measures have been derived from our financial statements and applied on a consistent basis as appropriate. We disclose these measures because we believe they assist readers in understanding the results of our operations and financial position and are meant to provide further information about our financial results to investors. These measures should not be considered in isolation or used in substitute for other measures of performance prepared in…
Read More:Teck Reports Unaudited Second Quarter Results for 2021