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Teck Resources (TSX:TCK.B) released its unaudited Q2 results on Thursday, reporting that all of its operations have remained cash flow positive. It reported that rotating shutdowns at its coal operations had commenced, and that “further steps to reduce production may be taken in the fourth quarter unless the supply-demand balance in the market improves.”
Teck Resources (TSX:TCK.B) released its unaudited Q2 results on Thursday, reporting that all of its operations have remained cash flow positive. It reported that rotating shutdowns at its coal operations had commenced, and that “further steps to reduce production may be taken in the fourth quarter unless the supply-demand balance in the market improves.”
As quoted in the press release, other highlights of Teck’s results included.
- Profit attributable to shareholders was $63 million and EBITDA was $596 million in the second quarter.
- Gross profit before depreciation and amortization was $676 million in the second quarter compared with $636 million in the second quarter of 2014.
- Cash flow from operations, before working capital changes, was $531 million in the second quarter of 2015 compared with $520 million a year ago.
- We have reached agreements with the majority of our customers for the third quarter of 2015, based on a quarterly benchmark of US$93 per tonne for the highest quality product and we expect total sales in the third quarter, including spot sales, to be at least 6.0 million tonnes of steelmaking coal.
- All critical milestones are being achieved on the Fort Hills oil sands project. The partners are focused on opportunities to manage capital cost in the current economic environment.
- A falling Canadian dollar, lower oil prices and our cost reduction program have contributed to reduce our U.S. dollar unit costs for our products with copper and coal unit costs falling by US$0.15 per pound and US$17 per tonne, respectively, compared to last year.
- The Red Dog concentrate shipping season commenced on June 28, with the first vessel sailing. We expect sales of 170,000 tonnes of contained zinc metal in the third quarter and 200,000 tonnes in the fourth quarter reflecting the normal seasonal pattern of Red Dog sales.
- Our liquidity remains strong at over $6.5 billion inclusive of $1.5 billion cash at July 22, 2015 and US$4.2 billion of undrawn, committed credit facilities. Our cash balance is in line with expectations and consistent with our goal of finishing the year with at least $1.0 billion in cash.
- On May 28, in response to steelmaking coal market conditions we announced rotating shutdowns totaling three weeks in the third quarter at our steelmaking coal mines. These shutdowns have commenced and further steps to reduce production may be taken in the fourth quarter unless the supply-demand balance in the market improves.
Teck president and CEO, Donald Lindsay, said:
Our operations have turned in a solid performance for the quarter. All of our operations have remained cash flow positive after sustaining capital investment and our balance sheet remains strong with over $6.5 billion of liquidity. This has been achieved notwithstanding a material drop in the U.S. dollar spot coal price since the beginning of 2015.