The Vancouver-based miner reported Thursday a net fourth-quarter loss of $464 million, which includes a non-cash, pre-tax charge of $597 million to account for lower future expectations for bitumen crude oil prices from its 21.3 per cent share in the project.
The charge comes despite a forecast for the oilsands mine’s average output to increase by 25 per cent while operating costs fall by 20 per cent this year versus 2020, Teck CEO Don Lindsay said on a conference call.
“We expect production to be lower and costs to be higher in the first half of 2021 and then improve in the second half as production is ramped up,” he said.
“We’ll be pushing hard to get Fort Hills back to full production along with our partners as soon as we can.”
Teck took a $474-million writedown on the oilsands mine last spring after one of its two production trains was shut down due to low oil prices as global fuel demand plummeted due to pandemic lockdowns. The train was restarted last fall and production is increasing.
In October, Lindsay said the company is interested in selling its stake in Fort Hills but won’t proceed until the mine is back at full operational strength.
Teck reported construction of its US$5.2-billion Quebrada Blanca Phase 2 copper mine expansion in Chile has reached 40 per cent overall completion.
It said the on-site workforce is back to pre-COVID-19 levels but added it has increased its estimate of the pandemic’s financial impact, including expensed costs and additional camp space, by US$50 million to between US$450 million and US$500 million.
Teck said its loss of the fourth quarter amounted to 87 cents per diluted share compared with a loss of $1.84 billion or $3.33 per diluted share a year earlier.
On an adjusted basis, Teck said Thursday it earned 46 cents per diluted share for its most recent quarter, up from an adjusted profit of 40 cents per diluted share a year earlier.
Analysts on average had expected an adjusted profit of 35 cents per share, according to financial data firm Refinitiv.
Teck reported fourth-quarter revenue of $2.56 billion, down from $2.66 billion in the fourth quarter of 2019.
Copper revenue rose to $820 million in the last three months of 2020 from $592 million in the year-earlier period, as sale volumes jumped to 173 million pounds from 159 million.
Sales of steelmaking coal fell to 6.1 million tonnes from 6.3 million tonnes and realized prices were off by about 18 per cent, Teck reported, bringing revenue to $861 million from $1.1 billion.
A cost reduction program launched in late 2019 has wrapped up after resulting in about $355 million in operating cost and $710 million in capital cost reductions compared with spending plans in June 2019, Teck said.
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