Teck(US:TECK)2023-07-27 19:18Financial Data and Key Metrics Changes - The company generated $1.5 billion in adjusted EBITDA for Q2 2023, with adjusted profit attributable to shareholders at $643 million or $1.22 per share on a diluted basis [51][36] - Liquidity at the end of the quarter was $7 billion, including $1.7 billion in cash [58] - The company paid $65 million in quarterly base dividends and repurchased $85 million of Class B shares [51][58] Business Line Data and Key Metrics Changes - Copper production was 64,000 tonnes, a 10% decrease compared to the same period last year due to lower grades and unplanned maintenance [38] - Zinc production at Red Dog was 134,000 tonnes, down 7% year-over-year, while refined zinc production at Trail was impacted by planned shutdowns [53] - Steelmaking coal production increased by 9% to 5.8 million tonnes compared to the same period last year, despite some operational challenges [56] Market Data and Key Metrics Changes - The company updated its annual copper production guidance to 330,000 to 375,000 tonnes, down from 390,000 to 445,000 tonnes [48] - The steelmaking coal market remains tight, with prices significantly above long-term averages due to reduced supply from key exporters [117] Company Strategy and Development Direction - The company is focused on advancing its copper growth pipeline, with significant projects like QB2 and Zafranal receiving regulatory approvals [32][63] - The company is pursuing an active portfolio management approach to maximize value from its growth pipeline, considering multiple investment criteria [65][66] - The board is evaluating options for its steelmaking coal business, aiming to maximize shareholder value while ensuring sustainability for employees and communities [60][100] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving full production rates at QB2 by the end of 2023 despite recent delays [81][75] - The company anticipates inflationary pressures on unit costs but expects to manage controllable operating expenditures effectively [45][46] - The regulatory environment in Chile is viewed positively, with ongoing efforts to secure necessary permits for future projects [127] Other Important Information - The company has committed to becoming nature-positive by 2030, with significant investments in biodiversity conservation [34][35] - The company is actively engaging with stakeholders regarding the permitting process for its projects, particularly in the context of recent permit revocations [10][11] Q&A Session Summary Question: Can you provide an update on QB2 progress? - Management confirmed that QB2 faced delays in construction and commissioning but remains confident in achieving full production rates by the end of the year [81][84] Question: What is the status of the port and jetty for shipping concentrate? - The jetty work is progressing, and the company expects to ship concentrate from its port facility by the end of the year [97] Question: How does the recent tax royalty increase in Chile affect the QB2 expansion? - Management is analyzing the impact of the proposed tax changes and believes the QB2 expansion should benefit from the existing tax stability agreement [95] Question: What is the outlook for the steelmaking coal market? - The market remains tight, with demand increasing while supply struggles, leading to prices above long-term averages [117] Question: When can shareholders expect updates on the steelmaking coal business separation? - Management is actively engaged with multiple parties interested in the steelmaking coal business and aims to maximize value for shareholders [100][120]