26 slides from Teck Resources Limited Class A's earnings presentation, Apr 23, 2013
Slide 1: First Quarter 2013 Investor Conference Call and Webcast
First Quarter 2013 Investor Conference Call and Webcast April 23, 2013
Slide 2: Forward Looking Information
Forward Looking Information Both these slides and the accompanying oral presentation contain certain forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and forward-looking information within the meaning of the Securities Act (Ontario).
Slide 3: Forward Looking Information
Forward Looking Information The foregoing list of assumptions is not exhaustive. Events or circumstances could cause actual results to differ materially. Factors that may cause actual results to vary include, but are not limited to: adverse developments in business and economic conditions in the pri
Slide 4: Speakers
Q1 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 4
Slide 5: Q1 2013 Highlights
Q1 2013 Highlights • Q1 coal sales of 6.6 million tonnes, up 24% • Coal site costs down 20% YoY • Identified $275M in annualized cost savings and deferrals • Purchased for cancellation 2.2 million Class B shares • Semi-annual dividend $0.45/share paid • Accounting change for capitalization of stripp
Slide 6: Q1 2013 Results: Steady volumes, good cash flow
Q1 2013 Results Steady volumes, good cash flow Revenues $ 2,330 million Gross Profit $ 994 million (before depreciation & amortization) Profit $ 319 million (attributable to shareholders) Adjusted Profit $ 328 million (attributable to shareholders) EBITDA $ 902 million 6
Slide 7: Adjusted Profit
Adjusted Profit ($ millions, net of taxes) Q1 ’13 Q1 ’12 (restated) Q4 ’12 (restated) Profit attributable to $ 319 $ 258 $ 199 Shareholders as reported Derivative (gains) losses (2) (59) (3) Financing items – 329 259 FX, asset sales & one-time charges 11 16 (47) Adjusted Profit 328 544 408 Adjusted
Slide 8: Coal
Coal Q1 Q1 Q4 Coal - Mt 2013 2012 2012 Production 6.2 6.3 6.4 Sales 6.6 5.3 6.4 Average Realized Price (US$/t) 161 223 159 (C$/t) 162 226 157 Site Costs (C$/t) 47 59 49 Transportation Costs (C$/t) 36 34 41 Financial Results C$ millions Revenue 1,060 1,198 1,010 Gross Profit 516 703 435 (before depre
Slide 9: Coal Update
Coal Update Rolling 4-Quarter Total Material • Q2 benchmark price for Moved and Coal Production premium coal settled at US$172/t 325 25 Rolling 4-Quarter Material Moved (millions of BCM) Operating ~10% below 27Mtpa Capacity Rolling 4-Quarter Production (million tonnes) 24 • Q2 coal sales expected to
Slide 10: Neptune and Westshore Update
Neptune and Westshore Update • New Neptune stacker reclaimer remains on schedule ‒ Expected on-site assembly in Q2 ‒ Pre-arrangement of alternative rail and port during construction • Westshore Update ‒ Berth No. 1 fully operational ‒ Road way complete, Berth No.1 fully accessible Westshore Terminal
Slide 11: Copper
Copper Q1 Q1 Q4 2013 2012 2012 Copper in Concentrate (kt) Production 69 63 88 Sales 71 65 89 Copper Cathode (kt) Production 14 18 15 Sales 11 18 16 Moly in Concentrate (M lbs) Production 2.4 3.0 3.0 Sales 2.5 3.1 3.6 Financial Results C$ millions Revenue 684 753 895 Gross Profit 351 378 463 (before
Slide 12: Copper Update
Copper Update Rolling 4-Quarter Contained in • Total cash costs after by-product Concentrate & Cathode credits about US$1.61/lbs 375 • Highland Valley: Rolling 4-quarter production: ~375kt ‒ Production up 42% YoY from 350 higher grades and recoveries kt • Carmen de Andacollo: 325 ‒ Production increa
Slide 13: HVC Mill Optimization Update
HVC Mill Optimization Update Photo Date: April 12, 2013 • Mill optimization project progressing on schedule • Completion expected end of 2013 and on stream in 2014 • Steel structure in place as well as major equipment • Construction over 30% complete • Ore grades expected to return to average reserv
Slide 14: Zinc
Zinc Q1 Q1 Q4 Zinc in Concentrate (kt) 2013 2012 2012 Production 147 147 157 Sales 124 135 207 Refined Zinc (kt) Production 74 74 67 Sales 73 76 67 Lead in Concentrate (kt) Production 23 23 26 Sales – – 50 Refined Lead (kt) Production 21 21 24 Sales 20 22 23 Financial Results C$ millions Revenue 585
Slide 15: Speakers
Q1 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 15
Slide 16: Q1 2013 – Cash Changes
Q1 2013 – Cash Changes $Millions Cash Flow from Operations* 776 Working capital changes (13) Purchase of property, plant, equipment and investments (468) Production stripping capitalized costs (210) Debt principal and interest payments (155) Purchase for cancellation of Class B shares (35) Dividends
Slide 17: IFRS Accounting Change: Deferred Stripping Costs
IFRS Accounting Change Deferred Stripping Costs Capitalized Stripping Costs Q1 2013 vs. Q1 2012, C$millions • Coal, HVC and Antamina Q1 2013 Q1 2012 250 make up ~85% of total capitalized stripping costs Red Dog, C$10M 200 QB, C$14M Red Dog, C$10M CMA, C$18M QB, C$7M CMA, C$13M • Guidance for the bal
Slide 18: IFRS Accounting Change: What is Capitalized Stripping?
IFRS Accounting Change What is Capitalized Stripping? Mine Plans Comprise of Multiple Phases, • Portion spent mining above Strip Ratio > Phase SR = Capitalized average strip ratio (SR) is Phases capitalized Several mine ‘phases’ make up • Theoretically would show single mine plan reported costs stab
Slide 19: Commodity Price and Settlement Adjustments
Commodity Price and Settlement Adjustments • Quarter-end price change Quarterly Price Change vs. Settlement Adjustment drives settlement adjustment 100 Q1 2012 • 2013 Q1 vs. 2012 Q4: Pre-tax Settlement Adjustment ($ millions) ‒ Lower copper and zinc prices Q3 2012 50 Pricing Q2 2011 Adjustment Q4 20
Slide 20: Cost Savings Initiative
Cost Savings Initiative C$200M Sustainable Cost Savings • $200M of sustainable annual + $75M One-time Savings savings identified 100% Other, 5% • Additional $75M of one-time Zinc, 6% savings and deferrals 75% Coal, 42% • Cost saving efforts include reductions in: 50% ‒ Consumption of repair parts ‒
Slide 21: 2013 Guidance Update
2013 Guidance Update Production Coal (27 Mt capacity) 24 – 25 M tonnes Coal site costs $51 – 58/ tonne Coal D&A $26 – 30/ tonne Copper 340 – 360 k tonnes Zinc in Concentrate 560 – 590 k tonnes Refined Zinc 280 – 290 k tonnes 21
Slide 22: 2013 Capex Guidance Update
2013 Capex Guidance Update Sustaining & Major Sustaining Total Other Development Enhancement Copper 265 360 625 Coal 265 80 345 Zinc 195 20 215 Corporate 20 20 $745 $460 $1,205 New Mine Major Project Spending Development Quintette 120 QB Phase II 450 Fort Hills & Frontier 400 Relincho 70 Other early
Slide 23: Speakers
Q1 Investor Conference Call Speakers Don Lindsay President & CEO Ron Millos SVP Finance & CFO 23
Slide 24: Project Developments
Project Developments • Quintette Coal Mine Permit approval expected Q2 2013 • Neptune Terminal Expansion Expansion to 12.5 Mtpa scheduled for Q2 2013 • Fort Hills Phase I Project sanction decision expected H2 2013 • Relincho Copper Mine Feasibility study Q4 2013 • QB Phase 2 SEIA re-file expected Q4
Slide 25: Summary
Summary Focused on shareholder value Coal production adjusted to market demand No change in long-term outlook Disciplined capital allocation Prudent cost savings & capital spend program 25
Slide 26: First Quarter 2013 Investor Conference Call and Webcast
First Quarter 2013 Investor Conference Call and Webcast April 23, 2013