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Strong copper, coal prices power Teck Resources’ profit beat www.reuters.com
Canadian miner Teck Resources Ltd on Wednesday beat market estimates for quarterly profit on the back of higher copper and coking coal prices, sending its shares 8% higher.
Copper prices climbed to record highs in the first three months of the year on fears that Russia’s invasion of Ukraine and the resulting sanctions from the West would upend supply. The metal has also benefited from demand sparked by its key role in the transition from fossil fuels to electrification.
Teck said its average realized price for copper rose about 15% to $4.51 per pound in the quarter, while its realized steelmaking coal prices more than doubled to $357 per tonne.
US-listed shares of the miner rallied 13%.
Diesel drives up costs
But Teck saw some pressure from rising inflation, especially in diesel prices, with operating costs surging 13%.
That prompted the company to raise its view for steelmaking coal unit cost in 2022 by around 9%. Teck kept its cost outlook for copper and zinc unchanged.
Miners have in recent months been grappling with logistical delays and rising costs of key supplies such as equipment and explosives, particularly after the Russia-Ukraine conflict erupted in March.
“The fact that the company maintained its base metals guidance and carries some natural protection from inflation via its oil and zinc asset is likely a win in our view,” JP Morgan analyst Michael Glick wrote in a note.
Copper production fell 6% to 67,200 tonnes in the quarter due to lower output from Teck’s operations in Highland Valley Copper, British Columbia, and Carmen de Andacollo in Chile.
Adjusted quarterly profit came in at C$2.96 per share, topping analysts’ estimate of C$2.89 per share, according to Refinitiv IBES data.
($1 = 1.2782 Canadian dollars)
(By Rithika Krishna; Editing by Vinay Dwivedi and Aditya Soni)
Published Date:2022-04-28
