14 slides from Teck Resources Limited Class A's earnings presentation, Jul 27, 2017
Slide 1: Second Quarter 2017 Results
Second Quarter 2017 Results July 27, 2017
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: Second Quarter 2017 Highlights
Second Quarter 2017 Highlights • Set Q2 records for coal production, coal sales & zinc production at Antamina • Increased gross profit by ~$900M1 • Fort Hills construction >92% complete • Reduced debt further to US$4.8B • Set new dividend policy, doubling our base dividend to $0.20/share annually •
Slide 4: Financial Results Overview
Financial Results Overview Q2 2017 Revenue $ 2.8 billion Gross profit $ 1.4 billion before depreciation & amortization* Profit $ 577 million attributable to shareholders EBITDA* $ 1.3 billion Adjusted profit $577 million attributable to shareholders* $1.00/share 4 *Non-GAAP financial measures. See “
Slide 5: Steelmaking Coal Results
Steelmaking Coal Results Sales (Mt) Realized Price (C$/tonne) Revenue (C$M) 0.6 86 918 6.962 6.3 169 1,596 83 678 Q2 2016 Q2 2017 Q2 2016 Q2 2017 Q2 2016 Q2 2017 Production (Mt) Unit Cost of Sales1,2 (C$/tonne) Gross Profit2,3 (C$M) 13 0.1 777 89 Total 76 6.7 6.8 975 36 Transport 34 Inventory 0 53 S
Slide 6: Steelmaking Coal Market Stabilizing?
Steelmaking Coal Market Stabilizing? Coal Price Assessments April 2017 Spike Q1 2017 From Mid-April 2017 • Cyclone disrupts • Price induced supply • Australian supply Q3 / 4 2016 Spike Australian supply response returns to market • Price induced • Irregular purchasing • Inventory drawdown by • Price
Slide 7: Copper Results
Copper Results Sales (kt) Realized Price (US$/lb) Revenue (C$M) 0.43 9% 23 92 562 2.58 517 69 2.15 Q2 2016 Q2 2017 Q2 2016 Q2 2017 Q2 2016 Q2 2017 Production (kt) C1 Unit Costs1,2 (US$/lb) Gross Profit2, 3 (C$M) 23% 21 0.08 91 1.34 253 70 206 1.26 Q2 2016 Q2 2017 Q2 2016 Q2 2017 Q2 2016 Q2 2017 Expe
Slide 8: Zinc Results
Zinc Results Zinc Sales (kt) Zinc Realized Price (US$/lb) Revenue (C$M) Conc1 2 Refined 18 2 21% 0.33 92 74 660 90 72 1.18 544 0.85 Q2 2016 Q2 2017 Q2 2016 Q2 2017 Q2 2016 Q2 2017 Q2 2016 Q2 2017 Zinc Production (kt) Lead Production (kt) Gross Profit2 (C$M) Conc1 Refined Conc1 Refined 5 5 5 50% 26 7
Slide 9: Fort Hills First Oil End of 2017
Fort Hills First Oil End of 2017 • Construction >92% complete • 4 of 6 areas turned over to Operations ‒ Utilities >95% complete ‒ Secondary Extraction first oil facilities 81% complete • >90% operations personnel hired 9 As at June 30, 2017. Source: Fort Hills Energy Limited Partnership, May 2017.
Slide 10: Settlement Pricing Adjustments
Settlement Pricing Adjustments Simplified Settlement Pricing Adjustment Model Quarterly Outstanding at Outstanding at Pricing Price March 31, 2017 June 30, 2017 Adjustments Change 100 Q4 2016 Pre-tax Settlement Adjustment (C$M) Q3 2016 Mlbs US$/lb Mlbs US$/lb US$/lb C$M 50 Q1 2016 Q1 2017 Q2 2017 Q2
Slide 11: Cash Flow
Cash Flow Cash Changes in Q2 2017 2500 13 382 1,408 2000 329 173 $ Millions 1500 87 58 82 1000 $846 $536 500 0 Cash - start Cash flow from Proceeds from Repayment of PP&E, incl. Capitalized Debt interest Dividends paid Other Cash - end of quarter operations sale of debt Fort Hills stripping and fina
Slide 12: Achieved Debt Reduction Target of <US$5B
Achieved Debt Reduction Target of <US$5B Public Notes Outstanding 8 7 Current Debt Portfolio1 6 Public notes outstanding US$4.8B 5 US$ Billions Average coupon 5.7% 4 Weighted average term to maturity ~15 years 3 Debt to debt-plus-equity ratio2,3 26% 2 Net debt to debt-plus-equity ratio3 23% 1 Undraw
Slide 13: Looking Forward
Looking Forward • Generating strong free cash flow • Five months to first oil at Fort Hills • Solid financial position 13
Slide 14: Second Quarter 2017 Results
Second Quarter 2017 Results July 27, 2017