Teck(US:TECK)2023-04-26 16:15Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $2 billion for Q1 2023, with adjusted profit attributable to shareholders at $930 million, or $1.78 per share on a diluted basis [110] - The company returned $321 million to shareholders through dividends and reduced debt levels by $144 million [22] - Liquidity remains strong at $8 billion, including $2.6 billion in cash [9][22] Business Line Data and Key Metrics Changes - Copper production was lower than the same quarter last year due to harder ore, but prices remained elevated despite a decline in the quarter [114] - Steelmaking coal sales were 6.2 million tons, above the same quarter last year, with prices remaining well above historic averages [21] - Zinc production was impacted by severe weather events and unplanned maintenance, but operations returned to stability by the end of the quarter [115] Market Data and Key Metrics Changes - The company expects Q2 sales of 6.2 million to 6.6 million tons as it completes deferred sales from the previous quarter [116] - Transportation costs in Q1 reflected higher rail rates and port costs, but are expected to normalize throughout the year [10] Company Strategy and Development Direction - The company plans to separate its metals business from the steelmaking coal business to unlock greater value [5][12] - A focus on copper growth is emphasized, with the QB2 project ramping up to full production rates expected by the end of the year [110][146] - The company aims to balance growth investments with cash returns to shareholders while maintaining a strong balance sheet [145][211] Management's Comments on Operating Environment and Future Outlook - Management noted that the market recognizes the value of both the coal and metals businesses, and there is significant interest in both [18][120] - The company is committed to a simpler and more direct separation approach based on shareholder feedback [107][138] - Management remains focused on maximizing shareholder value through responsible separation and development of high-quality projects [137][197] Other Important Information - The company was recognized as one of the Global 100 most sustainable corporations for the fifth consecutive year [9] - Inflationary pressures impacted operating costs by 6% compared to the same period last year, but unit cost guidance remains unchanged [142] Q&A Session All Questions and Answers Question: What are the possible alternatives for the separation of the business? - Management indicated that they will evaluate a range of options for a simpler and more direct separation, taking into account shareholder feedback [29][152] Question: How does the company view the coal business's value? - Management believes the quality of the steelmaking coal business is well recognized, and they will explore alternatives to maximize shareholder value [149][195] Question: What is the expected timeline for the separation strategy? - Management did not provide a fixed date but emphasized the importance of engaging with shareholders to develop a proposal that meets their needs [152][156] Question: How is the company addressing staffing levels in the Elk Valley? - Management reported progress in staffing levels but noted challenges in hiring heavy-duty mechanics, which is a specific trade area [172] Question: What is the impact of new mining laws in Mexico on the San Nicolás project? - Preliminary estimates suggest that the proposed legislation will not have a material impact on the development of San Nicolás [53][207]