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Teck Resources profit misses estimates as prices of steelmaking coal tumble

27th October 2020

By: Reuters

  

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Canada's Teck Resources missed analysts' estimates for quarterly profit on Tuesday, hurt by a steep drop in the prices of steelmaking coal, sending it US-listed shares down 8.2% in pre-market trade.

Miners globally have been struggling after the Covid-19 pandemic wreaked havoc on commodity markets, forcing companies to shut mines, slash production and even wind down some operations.

Teck said labor intensive activities such as maintenance, mine operations and projects continue to be impacted by Covid-19 safety protocols.

The company, however, said construction work at its Quebrada Blanca Phase 2 copper mine in Chile was being ramped up and it was expecting the project to be about 40% complete by year end.

Work at the site was suspended in March and remains partially on hold to limit the transmission of Covid-19.

Average price realized for steelmaking coal dropped 34.6% to $102 per tonne in the third quarter, while sales stood at 5.1-million tonnes compared with 6.1-million tonnes a year earlier.

The Vancouver-based miner also cut its forecast for copper production for the second half of the year by 5 000 t and now expects it to be between 14 000 t and 155 000 t.

Copper sales in the quarter fell to 69 000 t from 75 000 t.

Teck said profit attributable to shareholders was C$61-million ($46.26-million), or 11 Canadian cents per share, in the quarter ended September 30, compared with C$369-million, or 66 Canadian cents per share, a year earlier.

Excluding items, it posted a profit of 24 Canadian cents per share, missing analysts' average estimate of 27 Canadian cents, according to IBES data from Refinitiv.

Edited by Reuters

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