Teck Resources Ord Shs Class A T.TECK.A

TD

[retiredcf]

Is currently on their Action Buy List with a $47.00 target. GLTA

Teck Resources Ltd.

(TECK.B-T, TECK-N) C$33.05 | US$25.76

BC Floods Lower Q4/21 Coal Sales by 1.1-1.2 Million Tonnes

Event

Teck provided an update following severe weather in British Columbia.

Impact: NEGATIVE

Not unexpectedly, the heavy rain, severe flooding, and mudslides over the past several weeks in British Columbia have had a significant impact on Teck's ability to move coal from its mining operations to the west coast coal loading terminals. The company now expects that coal sales for Q4/21 will be lower by 1.1-1.2 million tonnes relative to its previous guidance. Coal sales for the quarter are now forecast at 5.2-5.7 million tonnes (previously 6.4-6.8 million tonnes).

Teck diverted coal shipments from the mines to the Ridley Terminal in Northern B.C. in an attempt to maximize coal sales during the period and this will have an impact on transportation costs. Rail providers CN and CP are steadily increasing shipments to B.C.'s Lower Mainland terminals (Neptune and Westshore); Teck expects to able to "substantially recover" the delayed Q4 sales in H1/22.

Teck now expects 2021 coal mine site costs to average ~64-66/t (above the previous forecast of $59-64/t). Operations at the mine sites have been largely unaffected and coal production for 2021 is now forecast at 24.5-25 million tonnes, down slightly from the previous forecast of 25 million tonnes. Transportation costs for 2021 are now forecast at $44-$46/t (previously ~$42/t).

The average FOB Australia steelmaking coal price for the three months ending November 30, 2021 settled at US$371/t, US$168/t higher versus three month average at end of August 2021. We estimate that the CFR China price for the same period was ~US$545/t. Based on these prices and the lower Q4/21 coal sales, we estimate that Teck's realized coal price for Q4/21 should be ~US$365/t, or $128/t higher than its Q3/21 realized price of US$237/t.

Higher coal prices will partially offset the weaker coal sales, but we still expect that Q4/21 EPS and EBITDA will be lower than we previously forecast. Depending on the mix of coal sales (China versus the ROW), we estimate that Q4/21 EPS could be ~ $0.40/sh lower than our current estimate of $2.99/sh, similarly Q4/21 EBITDA would be ~$350M lower than our current estimate of $2.9B.

[bendmeover]

for the most part really not that big of deal ....  why does this company always release bad news and never the good things  .seems they dont want the stock price to rise 

[Overertune]

Coking coal prices still stays above 350/t, can I assume that earnings each quarter (Q1 2022 etc) will still be more than 2.5 B/ 2.5$ per share? That is 10$/share per year, PE ratio 3 even without QB2?  Insanely cheap.