Teck reports quarterly loss with revenue increase, lowers 2024 copper production outlook again
Teck Resources Ltd. revealed that it has once again lowered its full-year forecast for copper production, which resulted in a drop in its share price, as reported by BNN Bloomberg.
The Vancouver-based company now projects copper output for 2024 to range between 420,000 and 455,000 tonnes. This revision follows a previous reduction in July, when the company had already adjusted its estimates from 435,000 to 500,000 tonnes.
Initially, Teck had forecast copper production between 465,000 and 540,000 tonnes for the year.
Teck also revised its 2025 production outlook for its Quebrada Blanca mine in Chile, one of its most significant assets.
The company now anticipates producing between 240,000 and 280,000 tonnes of copper from the site next year, down from the previous forecast of 280,000 to 310,000 tonnes.
The share price reaction was swift, with a mid-day trading drop of over five per cent.
CEO Jonathan Price sought to calm investor concerns during a conference call, stating, “We’ve looked very hard at all the operational and performance drivers here, and we believe the (new) guidance that we’ve put forward here is very much achievable.”
Price also explained that the company deliberately kept its forecast broad to account for uncertainties, given that the Quebrada Blanca mine is still in its ramp-up phase.
Challenges at the mine, including geotechnical issues and equipment-related problems, have contributed to the company's lower production numbers.
The second phase of the Quebrada Blanca expansion, valued at US$8.7bn, remains critical to Teck’s strategy of shifting towards metals that play a key role in global energy transition technologies, such as copper, which is used in solar panels, wind turbines, electric vehicles, and batteries.
Price acknowledged that there is still work to be done to improve ore recovery at the site, but he expressed confidence that the mine’s performance will significantly improve in the second half of 2025.
“The mine’s throughput has been ramping up steadily quarter over quarter, towards nameplate capacity,” he said. Price added that the company expects to achieve its design throughput rates by the end of this year and has seen indications that it could exceed those levels.
In the third quarter of 2024, the Quebrada Blanca mine produced 52,500 tonnes of copper, up slightly from the 51,300 tonnes produced in the second quarter as production continues to increase.
Teck also reported a significant one-time asset impairment related to its Trail operations, which contributed to a $748m loss from continuing operations in the third quarter.
This translated to a loss of $1.45 per diluted share, a sharp contrast from the $48m loss, or nine cents per share, it recorded in the same period last year.
However, revenue for the quarter climbed to $2.86bn, an increase from $1.99bn in the third quarter of 2023.
In addition to lowering its copper production forecast, Teck revised its expectations for molybdenum and refined zinc production for 2024, along with reducing its outlook for zinc net cash unit costs.
On an adjusted basis, the company earned 60 cents per diluted share for the quarter, up from 16 cents per share a year earlier. This surpassed the average analyst prediction of 37 cents per share, according to LSEG Data & Analytics.
