Teck CEO Don Lindsay says the company has had an 'exceptional start' to 2022
Canadian diversified major Teck Resources has reported an “exceptional” start to 2022, with record-setting first quarter financial results on the back of high commodities prices.
The TSX- and NYSE-listed miner reported record adjusted profit of C$1.6-billion, or C$3.02 a share in the first quarter – more than four times higher than the same period last year.
Adjusted earnings before interest, tax, depreciation and amortisation was also a quarterly record of C$3-billion, more than three times higher than the same period last year.
Profitability in the first quarter improved significantly from a year ago as a result of higher prices for all of Teck's principal products. Copper prices reached an all-time quarterly record average of $4.53/lb in the first quarter, and were up 17% from the same period a year ago, while zinc prices averaged $1.70/lb in the quarter, an increase of 36% from the same period a year ago.
Realized blended bitumen prices of $81.53/b increased sharply in the quarter owing to the impact of the Russian war in Ukraine on oil prices.
Realized steelmaking coal prices in the first quarter were $357/t, up from US$131/t in the same period last year. Teck reported that the increase in steelmaking coal prices from the fourth quarter of 2021 resulted in positive pricing adjustments of C$88-million (C$56-million, after-tax) in the first quarter.
The miner generated cash flows from operations of C$2.3-billion in the quarter, redeemed $150-million of its maturing 4.75% term notes and ended the quarter with a cash balance of C$2.5-billion.Liquidity currently stands at C$8-billion.
Teck has also announced its intention to repurchase a further $500-million in Class B subordinate voting shares. “This demonstrates both our confidence in the outlook for our business and our commitment to balance growth with shareholder returns,” CEO Don Lindsay said on Wednesday.
Commenting on Teck’s copper growth strategy, Lindsay also said that 2022 would be a “transformational year” for Teck as it expected its first copper at the QB2 project in the later part of the year.
There are now 12 000 workers on site at QB2 – the highest to date – as the impacts of the Omicron variant of Covid-19 subsided.
Assuming no further Covid waves or other major disruptions, Teck is expecting first copper from QB2's Line 1 in the fourth quarter.