Teck Reports Unaudited Third Quarter Results for 2019
VANCOUVER, British Columbia, Oct. 24, 2019 (GLOBE NEWSWIRE) — Teck Resources Limited (TSX: TECK.A and TECK.B, NYSE: TECK) (“Teck”) reported adjusted EBITDA1 2 of $1.1 billion for the third quarter. Adjusted profit attributable to shareholders1 2 was $403 million ($0.72 per share) compared with $466 million ($0.81 per share) a year ago. Profit attributable to shareholders was $369 million ($0.66 per share) for the third quarter of 2019 compared with $1.3 billion ($2.23 per share) a year ago.
“Over the past few years, we have focused our attention on maximizing production to capture margin during periods of higher commodity prices,” said Don Lindsay, President and CEO. “However, current global economic uncertainties are having a significant negative effect on the prices for our products, particularly steelmaking coal. As a result, we are focusing our attention on our RACE21™ program to improve efficiency and productivity across our business, the development of the QB2 project, which is a key component of Teck’s future growth, and the execution of our priority project at Neptune. We have also implemented a cost reduction program to reduce spending on our capital and operating costs for the balance of 2019 and 2020.”Significant ItemsAdjusted profit attributable to shareholders was $403 million ($0.72 per share) compared with $466 million ($0.81 per share) in the third quarter of last year. Profit attributable to shareholders was $369 million ($0.66 per share) in the third quarter compared with $1.3 billion ($2.23 per share) a year ago.
EBITDA was $1.0 billion in the third quarter compared with $2.1 billion in the third quarter of 2018. Our adjusted EBITDA in the third quarter totaled $1.1 billion compared with $1.2 billion last year.
Gross profit was $787 million in the third quarter compared with $1.0 billion a year ago. Gross profit before depreciation and amortization1 2 was $1.2 billion in the third quarter compared with $1.4 billion in the third quarter of 2018.
For the tenth straight year, we have been named to the Dow Jones Sustainability World Index, indicating that our sustainability practices are in the top 10% of the 2,500 largest companies in the S&P Global Broad Market Index. We were the top-ranked mining company on both the World and North American index.
Construction at QB2 continues with over 5,000 people actively working on site across the six major construction areas. The project continues to target construction completion in the fourth quarter of 2021.
We continued to advance our RACE21TM innovation-driven efficiency program in the third quarter to generate an initial $150 million in annualized EBITDA improvements by the end of 2019.
Our liquidity remains strong at $6.8 billion, including $1.6 billion in cash at October 23, 2019, of which $1.0 billion is on deposit in Chile for the development of the QB2 project.
While our financial position is strong, in light of uncertain economic conditions, we have implemented a company-wide cost reduction program and are deferring some of our planned capital projects, targeting reductions of approximately $500 million from previously planned spending through the end of 2020.
The Red Dog concentrate shipping season is expected to be complete in early November. We expect to ship approximately 1.05 million tonnes of zinc concentrate and 175,000 tonnes of lead concentrate, representing all of the concentrate available to be shipped from the operation.
In August, we signed a new three-year collective agreement with the supervisory union at Carmen de Andacollo. A regulated bargaining process with the workers’ union commenced in September. Mediation did not result in an agreement and the workers’ union commenced strike action on October 14, 2019.
The US$2.5 billion limited recourse project financing to fund the development of QB2 is expected to close in the fourth quarter. With funding from the project financing and the partnering transaction with Sumitomo Metal Mining Co. Ltd. (SMM) and Sumitomo Corporation (SC), our first contributions to the project are not expected until early 2021.We have updated our 2019 capital expenditures guidance for targeted reductions and deferrals of capital projects under our cost reduction program. We have lowered 2019 production guidance for our Trail Operations. All changes are outlined in our Guidance tables on pages 31 to 34 in the full unaudited third quarter results at link below. Notes:
1) Non-GAAP Financial Measure. See “Use of Non-GAAP Financial Measures” section for further information.
2) See “Use of Non-GAAP Financial Measures” section for reconciliation. This management’s discussion and analysis is dated as at October 23, 2019 and should be read in conjunction with the unaudited consolidated financial statements of Teck Resources Limited (“Teck”) and the notes thereto for the three and nine months ended September 30, 2019, the unaudited condensed financial statements of Teck and the notes thereto for the three months ended March 31, 2019 and with the audited consolidated financial statements of Teck and the notes thereto for the year ended December 31, 2018. In this news release, unless the context otherwise dictates, a reference to “the company” or “us,” “we” or “our” refers to Teck and its subsidiaries. Additional information, including our Annual Information Form and Management’s Discussion and Analysis for the year ended December 31, 2018, is available on SEDAR at www.sedar.com.This document contains forward-looking statements. Please refer to the cautionary language under the heading “CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION” below.Profit and Adjusted Profit