Teck Resources profit falls short as lockdowns, energy unit bite

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/File Photo

(Reuters) - Canadian miner Teck Resources Ltd TCKb.TOTECK.N reported a much bigger-than-expected 84% plunge in quarterly profit on Tuesday, hit by shutdowns due to the coronavirus outbreak and weak performance in its energy unit.

The blow from the health crisis is the latest setback as copper and other base metal prices were already under pressure from the long-drawn tariff war between the United States and China.

The miner has suspended its 2020 financial forecasts, temporarily suspended construction at its Quebrada Blanca Phase 2 project in northern Chile and withdrawn an application to build a C$20.6 billion Frontier oil sands mine in Alberta to ride out the storm.

Production at its steelmaking coal operations, Teck Resources’ biggest business, fell 19.7% to 4.9 million tonnes in the first quarter, while copper declined 1.4%.

During the quarter, the company was forced to reduce Fort Hills to a single-train facility resulting in lower production of bitumen and contributing to an impairment of $474 million.

The Vancouver-based company said adjusted profit attributable to shareholders fell to C$94 million ($66.4 million), or 17 Canadian cents per share, from C$587 million, or C$1.02 per share, a year earlier.

Analysts on average had expected the company to earn 20 Canadian cents per share according to Refinitiv IBES.

Revenue fell 23.5% to C$2.38 billion.

The company said operating crews have been increased to 75% from 50% of regular workforce levels at its steelmaking coal and Highland Valley Copper mine in British Columbia.

Reporting by Aakriti Bhalla and Arundhati Sarkar in Bengaluru; Editing by Sriraj Kalluvila