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Teck Resources profit misses estimates as prices of steelmaking coal tumble

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

FILE PHOTO: Visitors pass a sign of sponsor Teck Resources at the Prospectors and Developers Association of Canada (PDAC) annual conference in Toronto, Ontario, Canada March 1, 2020. REUTERS/Chris Helgren

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 tonnes and now expects it to be between 140,000 tonnes and 155,000 tones.

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

Teck said profit attributable to shareholders was C$61 million ($46.26 million), or 11 Canadian cents per share, in the quarter ended Sept. 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.

Reporting by Arunima Kumar, additional reporting by Maria Ponnezhath in Bengaluru; Editing by Krishna Chandra Eluri and Anil D’Silva

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