Teck Resources committed to cutting coal despite boost to Q4 profits (NYSE:TECK)

Teck Resources committed to cutting coal despite boost to Q4 profits (NYSE:TECK)

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Teck Resources (TECK -1.9%) turns lower despite reporting better than expected Q4 earnings, driven by higher prices for copper and steelmaking coal; the company also raised its annual base dividend and unveiled a plan to buy back as many as $100M worth of its shares.

Q4 profit attributable to shareholders swung to a $1.49B profit from a loss of $464M a year earlier, while revenues surged 72% Y/Y to $4.41B from $2.56B a year earlier.

The miner also raised its annual base dividend to $0.50/share from $0.20/share, and declared a dividend of $0.625/share, consisting of the quarterly base dividend of $0.125 plus a $0.50 supplemental dividend for the quarter.

Teck said its Q4 average price realized for copper climbed 35% Y/Y but production fell 7% to 72.6K metric tons, hurt by lower output from its Carmen de Andacollo mine from lower ore grades; gross profit in Teck’s steelmaking coal business unit increased by $1.4B, as realized steelmaking coal prices hit a record $351/ton.

For FY 2022, Teck expects copper production of 273K-290K metric tons, compared with 287K tons in 2021, while forecasting steelmaking coal sales of 6.1M-6.5M tons for Q1, compared with 6.2M tons in the year-ago quarter.

Despite the boost from steelmaking coal, CEO Don Lindsay said Teck remains committed to reducing its exposure to coal moving forward.

  • Coal is “a tremendous cash generation business,” but “both coal and oil sands will be a lower percentage of the portfolio, whether you measure it in terms of revenue or EBITDA,” Lindsay said during the earnings conference call.

Originally Posted on: https://seekingalpha.com/news/3805358-teck-resources-committed-to-cutting-coal-despite-boost-to-q4-profits?source=feed_tag_commodities
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