Teck Resources (TECK) Q3 2024 earnings summary

Executive summary

• Completed sale of steelmaking coal business, receiving $7.3 billion in cash and transitioning to a pure-play energy transition metals company focused on copper and zinc.

• Returned $720 million to shareholders in Q3 and over $1.3 billion year-to-date through dividends and buybacks, achieving a net cash position of $1.8 billion as of September 30, 2024.

• Achieved record copper production of 115,000 tonnes in Q3 2024, driven by QB ramp-up, and strong zinc performance at Red Dog with production up 14% year-over-year to 142,500 tonnes.

• Q3 2024 results impacted by a $1.1 billion pre-tax ($828 million after-tax) impairment charge at Trail Operations due to challenging zinc market conditions and a plant fire.

• Focused on safety and sustainability, with a 33% reduction in high-potential incident frequency rate year-over-year and recognition on Forbes World's Best Employers 2024 list.

Financial highlights

• Adjusted EBITDA was $986 million, more than doubling year-over-year, and adjusted EPS from continuing operations was $0.61, nearly quadrupling year-over-year, driven by strong copper and zinc prices and higher copper sales volumes.

• Gross profit before depreciation and amortization from copper segment more than doubled to $604 million; zinc segment increased 49% to $358 million year-over-year.

• Revenue rose to $2,858 million in Q3 2024 from $1,989 million in Q3 2023.

• Reported a non-cash after-tax impairment charge of $828 million on Trail Operations due to market conditions and a plant fire.

• $322 million paid in dividends and $398 million in share buybacks in Q3 2024.

Outlook and guidance

• 2024 copper production guidance lowered to 420,000–455,000 tonnes (from 435,000–500,000), and molybdenum to 3,000–4,000 tonnes (from 4,300–5,500).

• QB 2024 copper guidance narrowed to 200,000–210,000 tonnes; 2025 guidance revised to 240,000–280,000 tonnes, reflecting ongoing ramp-up and reliability improvements.

• Improved full-year zinc net cash unit cost guidance to $0.45–$0.55/lb (from $0.55–$0.65/lb) and total cash unit cost to $0.65–$0.75/lb (from $0.70–$0.80/lb), with refined zinc production guidance for Trail lowered to 240,000–250,000 tonnes due to fire impact.

• No change to Red Dog production guidance; Antamina and Carmen de Andacollo copper guidance unchanged.

• Expect QB ramp-up to reach design throughput rates by year-end 2024, with higher grades and recoveries anticipated in Q4 2024 and H1 2025.