Teck Resources Ltd. (NYSE:TECK), North America’s largest producer of steel-making coal, reported lower-than-expected Q1 profit due to higher costs, lower production and sales volumes.

BNN.ca

The company said on Tuesday that:

  • Unit production costs in the first quarter rose by $13 to $56 per ton from a year ago.
  • First-quarter coal production was 6.1 million tonnes, 8% lower than last year.

    • Teck, which also mines gold and silver, said:

  • adjusted profit attributable to shareholders rose to $671 million, or $1.16 per share, from $18 million, or 3  cents a share, in the first quarter of 2016. Analysts on average were expecting the company to earn  $1.29 per share.
  • revenue rose 70% to $2.89 billion short of analyst expectations of $3.04 billion…
  • Net profit attributable to shareholders jumped to $572 million, or C$0.99 per share, for the quarter ending March 31, from $94 million, or $0.16 share, in the same period last year.

    • Teck said a quarterly benchmark price for steel-making coal for the second quarter was not yet agreed upon due to cyclone Debbie’s impact on Australian supply.

    It expects total steel-making coal sales, including spot sales, of at least 6.8 million tonnes in the second quarter. That is in line with last month’s updated forecast.

    Steel-making coal prices almost tripled from a year ago and spot prices stabilized in the $150 to $160 per ton range during the quarter, while copper and zinc prices rose by 25 per cent and 66 per cent respectively, Teck said.

    Steel-making coal prices have soared from about $156 a ton at the end of March to more than $200 a ton, amid supply disruptions caused by a powerful cyclone in Australia.

     

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