Teck Resources (TSX: TECK.B) reported third quarter profit of C$1.59 billion, or C$3.24 per share, though more than 40% of that came from a non-cash writeback at its Trail Operations rather than from the mines.
Revenue climbed to C$4.52 billion from C$3.61 billion in the second quarter, helped by the start of the Red Dog shipping season and copper prices that averaged a record US$6.40 per pound. Reported earnings were lifted by a C$888 million pre-tax impairment reversal at Trail, which Teck tied to its optimized feed strategy at the smelter.
Strip that out and the picture is flatter. Adjusted earnings per share slipped to C$1.88 from C$1.93, while adjusted EBITDA edged up to C$2.31 billion from C$2.19 billion.
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Operating cash flow of C$1.6 billion lifted cash to C$6.7 billion from C$6.1 billion at the end of June. Total debt held steady at C$4.79 billion, leaving Teck with net cash of C$1.9 billion, up from C$1.24 billion, and liquidity of C$10.9 billion.
Production is where the quarter weakened.
Copper output fell 15% to 115,700 tonnes from 135,900 tonnes in the second quarter. Quebrada Blanca produced 47,200 tonnes, down from 55,800 tonnes, after August snowstorms and high winds caused power outages at site and wet conditions in September limited access to higher grade ore. Recoveries at QB slipped to 81.1% from 83.3%, and grades averaged 0.55%. Carmen de Andacollo also endured an extended weather-related shutdown.
Copper net cash unit costs rose to US$1.77 per pound from US$1.64, with QB climbing to US$2.48 per pound from US$1.83 on lower sales volumes and by-product credits. Teck nonetheless cut its full year copper net cash unit cost guidance to US$1.80 to US$2.00 per pound from US$1.85 to US$2.20, citing strong by-product pricing, and lowered zinc net cash cost guidance to US$0.30 to US$0.40 per pound from US$0.65 to US$0.75.
Annual copper production guidance of 455,000 to 530,000 tonnes was left unchanged, including 200,000 to 235,000 tonnes at QB. The mine has produced 158,500 tonnes through September, leaving roughly 41,500 tonnes needed in the fourth quarter to reach the bottom of that range.
Teck expects Highland Valley Copper to finish near the top of its range and Carmen de Andacollo at the low end. The Highland Valley outlook was issued days after the United Steelworkers began strike action at the operation. Red Dog zinc concentrate sales of 246,700 tonnes landed within guidance for the quarter.
The merger of equals with Anglo American remains on track to close within 12 to 18 months of its September 2025 announcement. Teck also disclosed a fatality on October 27 at the Antamina mine, its joint venture with BHP, Glencore and Mitsubishi.
Teck Resources Class B shares last traded at $87.42 on the TSX.
