Teck Resources’ 1Q17 earnings
Teck Resources (TECK), the Canadian-based (EWC) diversified miner, released its 1Q17 earnings on April 25. In this article, we’ll analyze Teck Resources’ 1Q17 earnings. We’ll also see what factors drove the company’s 1Q17 performance.
- Teck Resources reported revenues of 2.9 billion Canadian dollars, or ~$2.1 billion, in 1Q17. It posted revenue of nearly 3.6 billion Canadian dollars, or ~$2.7 billion, in 4Q16. In 1Q16, it posted revenue of 1.7 billion Canadian dollars, or ~$1.3 billion. Teck Resources’ 1Q17 revenues fell short of analysts’ estimates.
- Teck Resources’ average realized prices (or ARP) improved considerably in the quarter. The company reported ARP of $213 per metric ton of steelmaking coal, $2.65 per pound of copper, and $1.26 per pound of zinc in 1Q17. To put this in context, the company had reported ARP of $75 per metric ton of steelmaking coal, $2.12 per pound of copper, and $0.76 per pound of zinc in the corresponding quarter last year.
- Teck Resources generated adjusted EBITDA (earnings before interest, tax, depreciation, and amortization) of 1.5 billion Canadian dollars, or ~$1.1 billion, a year-over-year (or YoY) increase of 231%. Though Teck Resources’ 1Q17 EBITDA was up on a YoY basis, it fell 20.6% as compared to 4Q16. Lower realized coal prices were the key driver of the sequential decline in Teck Resources’ 1Q17 EBITDA.
- Teck Resources has cut its net debt by ~$1 billion in 1Q17 due to the steep rally in commodity prices. Other miners including BHP Billiton (BHP) and Rio Tinto (RIO) (TRQ) have also been working to cut their debt levels. You can read, How Teck Resources Emerged Stronger from Its Downturn to explore how the company successfully managed its leverage position.
In the next article, we’ll analyze Freeport-McMoRan’s 1Q17 performance.