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New UserCoal rally, cost cuts help Teck Resources swing to profit
28 Oct 2016
Canada's largest diversified miner, Teck Resources (TSX:TCK.B) (NYSE:TCK) logged Thursday better-then-expected quarterly revenue thanks mainly to a sustained rally in coking coal as well as the firm’s cost-cutting measures implemented in the three months to Sept. 30
The Vancouver-based company, the best-performing Canadian stock in seven years, swung to a profit of Cdn$234 million ($174.9 million), or 40 cents per share in third quarter of the year, compared with a loss of Cdn$2.15 billion, or C$3.73 per share, in 2015.
The miner, with operations and projects in Canada, the US, Chile and Peru, has risen five-fold on the S&P/TSX Composite Index to a market value of $16.2-billion, the biggest year-to-date gain of any Canadian stock since 2009.
Teck’s bonds are also the best-performing debt on the Bank of America Merrill Lynch U.S. High Yield Index, returning 104%, according to Bloomberg TV.
Key to the company’s success has been the ongoing rally of coking coal prices, as it is the largest producer of the steel-making kind in North America. Only last week, the commodity reached $230 a tonne, up from $75 a tonne just a few months ago.
As a result, Teck has lifted its production forecast for the year. Now it expects to generate about 27-27.5 million tonnes, compared with its previous forecast of 26-27 million tonnes.
Since early 2015 the company has been implementing a series of cost-cutting measures, including placing projects in the back burner and the reduction of about 9% its global workforce, through a combination of layoffs and attrition.
SOurce:Mining.com