Close X
Sunday, November 10, 2024
ADVT 
National

Teck says weather, COVID-19 hitting results

Darpan News Desk The Canadian Press, 28 Jan, 2022 10:42 AM
  • Teck says weather, COVID-19 hitting results

VANCOUVER - Teck Resources Ltd. said Friday that its coal sales fell below its guidance because of extreme weather in British Columbia and warned that COVID-19 was leading to higher costs and could disrupt production.

Shares in the company were down $2.32, or 5.7 per cent, at $38.36 in mid-morning trading on the Toronto Stock Exchange.

Teck said steelmaking coal sales for the fourth quarter came in at 5.1 million tonnes, below the 5.2 million to 5.7 million tonnes in its revised guidance it issued Dec. 5 after the record rainfall in B.C. that knocked out rail and road infrastructure.

The lower sales came as extreme cold weather in B.C. this winter led to further interruptions and substantial reductions to rail service and port activities.

The company had guidance for 6.4 million to 6.8 million tonnes sold for the quarter before the November deluge.

Vancouver-based Teck said coal production at Elk Valley wasn't affected by the November events because inventories at its operations were low at the time, but that the cold weather disruptions have led to near-record inventories and the company could be forced to reduce production if there are further transportation disruptions.

The disruptions have also increased costs at its operations, but Teck said higher steelmaking coal prices should offset those costs and it expects to substantially make up the lost sales volume in the first half of this year.

Teck also said that the Omicron variant of COVID-19 is leading to increased staff absences at its coal operations in B.C. as well as at its QB2 project in Chile.

It says that while absences have yet to have a major impact, the situation poses a risk to first quarter production and that costs have risen because of labour inefficiencies related to COVID-19.

The company said it has updated its COVID-19 capital cost guidance for QB2 to between US$900 million and US$1.1 billion, up from its previous estimate of US$600 million.

The company also warned that it was seeing inflationary cost pressures, especially on diesel prices, supplies and labour costs, and that increases it saw in the fourth quarter are expected to continue into this year.

National Bank analyst Shane Nagle said in a note that while fourth-quarter results still showed a record quarter, he expects earnings to take a hit.

He said, however, that he expects improvements in Teck's coking coal operations this year once the Neptune terminal expansion in North Vancouver, B.C., is complete, while record coal prices should also help the company.

"Teck's strong balance sheet, cost reduction initiatives, organic growth within the copper division and long-term commitment to returning capital to shareholders are all supportive of a higher valuation than currently ascribed by the market."

MORE National ARTICLES

Quebec to impose tax on unvaxxed

Quebec to impose tax on unvaxxed
Premier Francois Legault made the announcement as the province reported another daily record for virus-related hospitalizations. Of the 2,742 patients in Quebec hospitals with COVID-19 on Tuesday, 255 of them were in intensive care.

Quebec to impose tax on unvaxxed

Businesses eye rethink of parental leave in EI

Businesses eye rethink of parental leave in EI
It's an idea that has been floated previously, to hive off the special benefits for new parents from the EI system, given the growth in demand for the leaves, although how to finance it has been a key stumbling block. 

Businesses eye rethink of parental leave in EI

Zelenskyy talks Russia sanctions with Trudeau

Zelenskyy talks Russia sanctions with Trudeau
Zelenskyy delivered that message to Trudeau in their Tuesday morning telephone call, which came on the eve of a key meeting in Brussels between the 30-country NATO alliance and Russia.

Zelenskyy talks Russia sanctions with Trudeau

Slim majority support lockdowns amid Omicron

Slim majority support lockdowns amid Omicron
56 per cent of respondents in the poll conducted by Leger and the Association of Canadian Studies agreed governments are making the right decisions to limit the spread of Omicron and keep the health system from being overrun.    

Slim majority support lockdowns amid Omicron

Canada can supply potential 4th doses: Trudeau

Canada can supply potential 4th doses: Trudeau
Trudeau made the pledge in a statement issued late Monday after he spoke with provincial and territorial leaders, saying Ottawa will do all it can to help them cope with the fifth wave of the pandemic.

Canada can supply potential 4th doses: Trudeau

First wave of intense rainstorm reaches B.C.

First wave of intense rainstorm reaches B.C.
The latest atmospheric river to wash over British Columbia was expected to soak parts of the south coast with as much as 150 millimetres of rain in a series of waves that won't relent until Thursday, Environment Canada said. Rainfall warnings covered the west coast of Vancouver Island and the inner south coast, including Metro Vancouver and the Fraser Valley.

First wave of intense rainstorm reaches B.C.