Teck Resources Drops After Forecasting Higher Coal Costs
Teck Resources Ltd. (TCK/B), the second-largest exporter of seaborne coal used in steelmaking, slid the most in more than seven months after forecasting higher costs to mine the commodity.
Teck fell 6.7 percent to C$26 in Toronto, the biggest decline since June 24. Shares of the Vancouver-based company have dropped 23 percent in the past year.
Coal mining costs this year will be C$55 to C$60 ($50 to $55) a metric ton, compared with C$52 in the fourth quarter, reflecting longer-haulage distances and rising fuel prices, Teck said today in a statement.
“The company is warning that its mine plan for the coal operations includes an increase in the average waste haul distance that will have a significant impact on unit costs and that this will continue into 2015,” Greg Barnes, a Toronto-based analyst at TD Newcrest Inc., wrote today in a note to clients.
Coal accounted for 44 percent of Teck’s revenue last year, the statement showed. The company also mines copper, which represented 30 percent of sales, and zinc, which made up 26 percent.
Net income in the fourth climbed to C$232 million from C$200 million a year earlier, Teck said. Profit excluding one-time items was 40 cents a share, missing the 43-cent average of 26 estimates compiled by Bloomberg. Sales declined to C$2.38 billion from C$2.73 billion, beating the C$2.31 billion average estimate.
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