Teck profit slumps on lower coal prices; flags virus hit
Canadian miner Teck Resources reported a 76% slump in fourth-quarter adjusted profit on Friday, hurt by lower prices for steelmaking coal and warned that the coronavirus epidemic would impact its earnings.
Copper and other base metal prices have suffered from a long-drawn tariff war between the United States and China and fears of slowing global growth. The coronavirus outbreak is also expected to dampen demand in China, the world's biggest copper consumer.
The miner warned that the outbreak will have a "material" effect on the demand and price of its commodities as well as on its suppliers, but said it did not immediately know the extent and duration of the impact.
Teck Resources said it reduced production and shut down its Neptune Bulk Terminals in British Columbia mainly due to weak short-term demand caused by the virus.
The company said production at its steelmaking coal operations, its biggest business, fell 8.2% to 6.7 million tonnes. The average realized price for the commodity fell by 31%.
The company said it took non-cash, impairment charges totaling C$999-million in the quarter, which included C$910-million related to its Fort Hills oil sands mining.
On an adjusted basis, income fell to C$122-million, or 22 Canadian cents per share, in the quarter ended on December31, from C$500-million, or 87 Canadian cents per share, in the previous year.
Revenue of the company, which mines copper and zinc, fell 18.2% to C$2.66-billion.
In early-February, the company flagged a hit to first-quarter steel-making coal sales as it had been affected by bad weather-related rail and terminal disruptions in British Columbia.
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