• Revenue from Sale of Steelmaking Coal Business: USD 8.6 billion.
• Cash Returned to Shareholders in 2024: USD 1.8 billion, including USD 514 million in dividends and USD 1.25 billion in share buybacks.
• Debt Reduction in 2024: USD 2.5 billion.
• Liquidity as of December 31, 2024: USD 11.3 billion, including USD 7.1 billion in cash.
• Net Cash Position as of December 31, 2024: USD 2.1 billion.
• Adjusted EBITDA in 2024: USD 2.9 billion, more than double the prior year.
• Fourth Quarter Adjusted EBITDA: USD 835 million, a 160% increase compared to the same period last year.
• Annual Copper Production in 2024: 446,000 tonnes, a 50% increase from the prior year.
• Reduction in Corporate Costs in 2024: 21% or USD 88 million compared with 2023.
• Fourth Quarter Cash Flow Generation: USD 1.3 billion.
• Fourth Quarter Cash Returned to Shareholders: USD 549 million.
• Fourth Quarter Debt Reduction: USD 275 million.
• Fourth Quarter Copper Production at QB: 67,000 tonnes.
• 2025 Copper Production Guidance: 490,000 to 565,000 tonnes.
• 2025 Copper Net Cash Unit Cost Guidance: USD 1.65 to USD 1.95 per pound.
• 2025 Zinc Production Guidance: 525,000 to 575,000 tonnes.
• 2025 Zinc Net Cash Unit Cost Guidance: USD 0.45 to USD 0.55 per pound.
• 2025 Sustaining Capital and Capitalized Stripping Guidance: CAD 1 billion to CAD 1.2 billion.
• 2025 Growth Capital Guidance: USD 625 million to USD 700 million.

• Warning! GuruFocus has detected 4 Warning Sign with HNI.

Release Date: February 20, 2025

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Teck Resources Ltd (NYSE:TECK) completed the sale of its steelmaking coal business, repositioning as a pure-play energy transition metals company focused on copper and zinc.
• The company announced the largest cash return to shareholders in its history, returning $1.8 billion in cash, including $514 million in dividends and $1.25 billion in share buybacks.
• Teck Resources Ltd (NYSE:TECK) reduced its debt by $2.5 billion and maintained a strong balance sheet with $11.3 billion in liquidity, including $7.1 billion in cash.
• The company set a record for annual copper production with a 50% increase from the prior year to 446,000 tonnes.
• Teck Resources Ltd (NYSE:TECK) received recognition for its sustainability leadership, being named one of Canada's Top 100 Employers and one of the World's Top Companies for Women in 2024.

Negative Points

• The company faces potential challenges from tariffs and trade restrictions between the US and Canada, although it does not expect a material impact on its business.
• Teck Resources Ltd (NYSE:TECK) experienced an increase in net cash unit costs for its copper segment due to the ramp-up of QB operations.
• The zinc segment's net cash unit costs are expected to increase in 2025 due to lower zinc production and higher labor and consumable costs.
• The Highland Valley life extension project faces delays due to a challenge by an indigenous government organization, impacting the approval process.
• Trail operations were impacted by a localized fire, affecting refined zinc production, and the company is focused on maximizing profitability and cash generation from this asset.

Q & A Highlights

Q: Can you provide more details on the QB2 ramp-up and its performance since the January shutdown? A: Jonathan Price, CEO: The ramp-up is progressing well and aligns with our benchmark ramp-up timelines. The 18-day shutdown in January for maintenance and reliability work is reflected in our 2025 guidance of 230,000 to 270,000 tonnes. Post-shutdown, operations have been running according to our plans, and we are confident in achieving our guidance range.

Q: What is the planned schedule for future maintenance shutdowns at QB2? A: Jonathan Price, CEO: We expect the plant's online time to be around 92%, implying a shutdown of about seven days each quarter. We plan to maintain this cadence throughout 2025.

Q: How does Teck plan to balance its strong balance sheet with capital allocation, shareholder returns, and potential M&A? A: Jonathan Price, CEO: Our capital allocation focuses on value creation for shareholders. We have a significant share buyback authorization and a base dividend. Excess cash will be returned to shareholders or invested in low-capital, high-return projects like Highland Valley, Zafranal, and San Nicolas. Our focus remains on organic growth rather than M&A.

Q: Can you provide an update on the potential tie-up or JV with Collahuasi? A: Jonathan Price, CEO: We recognize the potential value of a tie-up with Collahuasi and have engaged in discussions with partners. However, our primary focus is on optimizing QB's ramp-up and debottlenecking. Discussions are confidential, but we aim to maximize value for Teck shareholders.

Q: What are the key factors influencing the decision to sanction the Zafranal project? A: Jonathan Price, CEO: Sanctioning Zafranal depends on completing studies, engineering work, and securing permits. The project's economics, including strong IRRs and cash flow potential, are compelling. We are progressing towards a potential sanction decision, focusing on ensuring all financial metrics align with our expectations.

Q: How does Teck view its zinc segment in terms of capital allocation and future growth? A: Jonathan Price, CEO: We view capital allocation holistically, with zinc competing for capital based on returns. Zinc fundamentals are attractive, and Red Dog is a world-class operation. We aim to extend Red Dog's life and maintain a strong position in the zinc market, supported by potential future sources like San Nicolas.

Q: What is the status of the Highland Valley life extension project, and how are you addressing indigenous concerns? A: Jonathan Price, CEO: We are in the final phases of the EA process, with a formal dispute process in place to resolve issues. We have agreements with other indigenous groups and continue to engage with SSN. We are confident in moving forward successfully and expect to sanction the project later this year.

Q: How does Teck plan to address the cash flow challenges at Trail operations? A: Jonathan Price, CEO: We are focused on profitability and cash generation at Trail, implementing cost reductions and optimizing operations. Trail is strategically important, producing critical metals like germanium. We aim to maintain its place in the portfolio by ensuring profitability and leveraging its strategic benefits.

For the complete transcript of the earnings call, please refer to the full earnings call transcript.