Teck Resources Earnings Call Highlights Strong Year

Teck Resources (($TSE:TECK.B)) has held its Q4 earnings call. Read on for the main highlights of the call.

Teck Resources Limited’s earnings call highlighted a positive sentiment driven by a strong year marked by robust financial performance, strategic transformation, and record copper production. Despite some challenges in zinc production and the potential impacts of tariffs, the company’s outlook remains optimistic with a focus on growth in copper and substantial shareholder returns.

Transformation and Strategic Shift

Teck Resources Limited has successfully transitioned into a pure-play energy transition metals company by completing the sale of its steelmaking coal business for $8.6 billion. This strategic move has significantly strengthened the company’s balance sheet and enabled a notable cash return to shareholders.

Strong Financial Performance

In 2024, Teck Resources Limited returned $1.8 billion in cash to shareholders, reduced its debt by $2.5 billion, and maintained $11.3 billion in liquidity. The company’s adjusted EBITDA doubled to $2.9 billion, while corporate costs were reduced by 21%, showcasing efficient financial management.

Record Copper Production

Teck Resources achieved an impressive 50% increase in annual copper production, totaling 446,000 tons. The QB operation ramped up to design throughput rates, contributing to record production for three consecutive quarters, with continued growth expected.

Zinc Segment Performance

The zinc segment, led by Red Dog, improved its performance by increasing zinc in concentrate production and reducing costs. Sales volumes surged by 24% in Q4, driven by strong sales from Red Dog.

Cash Returns and Share Buybacks

The company returned $1.8 billion to shareholders in 2024, including $549 million in Q4 alone. Additionally, Teck authorized $3.25 billion in share buybacks, with $1.8 billion still available for future repurchases.

Sustainability and Recognition

Teck Resources Limited’s commitment to sustainability was evident as it released its 2024 climate change and nature report. The company was also recognized as one of Canada’s top 100 employers and one of the world’s top companies for women.

Positive Outlook for Copper Growth

Looking ahead to 2025, Teck Resources expects copper production to grow between 490,000 and 565,000 tons. The company anticipates a reduction in net cash unit costs and improved EBITDA margins, reinforcing its bullish outlook.

Challenges in Zinc Production

Teck Resources faces challenges in zinc production, with expectations of decreased production in 2025 due to the advancing mine life at Red Dog. This is likely to result in increased net cash unit costs driven by lower production and higher labor costs.

Operational Challenges at Trail

The Trail operations experienced difficulties with refined zinc production following a fire in the electrolytic plant. Consequently, production rates are expected to be lower in 2025, potentially impacting cash flow negatively.

Potential Tariff Impacts

Teck Resources is monitoring potential tariffs between the US and Canada that could affect trade flows, particularly for Trail’s refined products, posing a potential risk to the company.

Forward-Looking Guidance

Teck Resources Limited concluded the fourth quarter of 2024 with substantial progress and financial performance. The company’s outlook for 2025 includes further growth in copper production, a reduction in net cash unit costs, and continued shareholder returns, underscoring their strong financial positioning and strategic execution.

In summary, Teck Resources Limited’s earnings call painted a positive picture of the company’s transformation and financial health. The strategic shift to focus on energy transition metals, coupled with impressive financial metrics and record copper production, sets a promising stage for future growth, despite some operational challenges and external risks.