Coal slump hits Teck’s profit, output forecast
Canada’s largest diversified miner Teck Resources (TSX:TCK.A, TCK.B), (NYSE: TCK) posted Thursday a 21% drop in quarterly profit and cut its 2015 coal production forecast due to falling demand from China and increased supply from Australia.
The company, which is temporarily shutting down coal mines in Canada for three weeks this summer, cut its 2015 coal production forecast to 25-26 million tonnes from 26.5-27.5 million tonnes.
The Vancouver-based miner noted that unless the supply-demand balance improves it may take further steps to reduce production in the fourth quarter.
Net profit attributable to shareholders, said Teck, fell in the quarter to $63 million, or 11 cents per share, from $80 million, or 14 cents per share, in the same period last year.
Excluding one-time items, Teck earned an adjusted profit of $79 million or 14 cents per share for the quarter, up from $72 million or 13 cents per share a year ago.
Revenue totalled nearly $2 billion, down slightly from just over $$2 billion in the same quarter last year.
Teck’s balance sheet has come under pressure because the miner has committed $2.9 billion to its Fort Hills oil sands project in Alberta, right at one of the worst times for coal producers. However, the company said the project remains on schedule for first production in early 2017, at which point Teck hopes oil prices will have recovered from current lows.
Other Teck operations are the Quebrada Blanca copper mine in Chile and Antamina in Peru. it also has the Highland Valley Copper mine in British Columbia and Duck Pond operation in Newfoundland.
The firm, controlled through multiple voting shares by the Keevil family and Sumitomo Metal Mining Co. Ltd., is also one of the world’s largest producers of zinc and a major producer of steelmaking coal with five coal mines in B.C. and another in Alberta.