Just when we thought the stormy waters may be subsiding. Notice the use of "long term" in the secondary headline below. It's enough to ruin your Thursday, if not the next few years. Oh brother!
Diversified Miner Teck Resources Swings to Loss on Asset Write-Down
Company says write-down reflects expectations for lower commodity prices over the near and long terms
Teck Resources Ltd. on Thursday posted a quarterly loss of 2.15 billion Canadian dollars ($1.6 billion) after recording impairment charges triggered by slumping commodity prices.
The Vancouver-based diversified miner, a major producer of coal, copper and zinc, posted C$2.16 billion of impairment charges in its fiscal third quarter, the bulk of which was related to its steelmaking coal operations.
Coal miners have been under pressure as prices have slumped to multiyear lows amid concerns about waning demand from China, the top consumer of the commodity, and oversupply issues.
Teck has been working to cut costs as prices for coal, copper and zinc fall, including idling its Canadian coal operations to cut output by 22% and slashing its dividend earlier this year.
“We are taking significant steps to meet the challenge of low commodity prices,” Chief Executive Don Lindsay said in a statement.
Teck, the world’s second-largest exporter of steelmaking coal after Australia’s BHP Billiton Ltd., swung to an overall loss of C$3.73 a share in its latest quarter from a profit of 14 Canadian cents a year earlier.
Excluding items, it earned C$29 million, or 5 Canadian cents a share, which was ahead of the 1 Canadian cent analysts polled by Thomson Reuters were expecting.
Revenue dipped to C$2.10 billion from C$2.25 billion, but also beat the C$1.96 billion analysts expected.
Teck said the write-down in the quarter, which included C$1.99 billion for its coal operations, reflect expectations for lower commodity prices over the short, medium and long terms.
The remainder of the impairment included C$413 million for its copper assets, C$31 million for zinc operations and C$464 million for the Fort Hills oil-sands project. Teck owns a 20% stake in Fort Hills with partners Suncor Energy Inc. and Total SA.
Teck said its steelmaking coal production fell 19% to 5.5 million metric tons in the latest quarter, while its average realized coal price fell 20% to $88 a ton. Copper prices and zinc prices fell 25% and 20%, respectively.
Write to Judy McKinnon at judy.mckinnon@wsj.com
http://www.wsj.com/articles/diversified-miner-teck-resources-swings-to-loss-on-asset-write-down-1445512905
