Teck Resources Ltd (NYSE:TECK) Q4 2019 Earnings Conference Call - Final Transcript

Feb 21, 2020 • 11:00 am ET


Teck Resources Ltd (NYSE:TECK) Q4 2019 Earnings Conference Call - Final Transcript


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Ladies and gentlemen, thank you for standing by. Welcome to Teck Resources' Q4 2019 Earnings Call. [Operator Instructions] Later, we will conduct a question-and-answer session. This conference call is being recorded on Friday, February 21, 2020.

I would now like to turn the conference call over to Fraser Phillips, Senior Vice President, Investor Relations & Strategic Analysis. Please go ahead, sir.

Fraser Phillips

Thanks very much, Mott and good morning, everyone. And thank you for joining us for Teck's fourth quarter 2019 results conference call. Before we begin, I would like to draw your attention to the caution regarding forward-looking statements on Slide 2. This presentation contains forward-looking statements regarding our business. This slide describes the assumptions underlying those statements. Various risks and uncertainties may cause actual results to vary, Teck does not assume the obligation to update any forward-looking statement. I'd also like to point out that we use various non-GAAP measures in this presentation. You can find explanations and reconciliations regarding these measures in the appendix.

With that, I will turn the call over to Don Lindsay, our President and CEO.

Donald R. Lindsay

Thank you, Fraser and good morning, everyone. I will begin on Slide 3 with highlights from our fourth quarter and our year end results, followed by Ron Millos, our CFO, who will provide additional color on our financial results, and we will conclude with a Q&A session. Ron and I and additional members of our senior management team would be happy to answer any questions. So commodity prices were negatively impacted by global economic uncertainty in 2019. This has continued into 2020. There were some signs of improvement in December and early January within an agreement on a US-China Phase 1 trade deal, but then the coronavirus emerged, and the full impact of the virus is still unknown. We are monitoring developments in order to be in a position to take appropriate action.

It has been a difficult start to the year. In addition to the coronavirus, our steelmaking coal operations in British Colombia, have also been impacted by logistics constraints caused by severe winter weather in January and early February. And then, more recently by railway interruptions across the country and as many of you know we are Canada's largest railway customer. Given this backdrop, our focus remains on those aspects of our business that are within our control.

So with that, I'll turn to highlights from our fourth quarter of 2019. In that respect, we made significant progress on our four key priorities. First, construction continues at QB2 with over 7,500 people actively working on site across the six major construction areas. We closed the $2.5 billion project financing in the fourth quarter, and on February 3, we announced an agreement with AES Corporation to source approximately half of QB2's total operating power needs from renewable sources. QB2 is a world-class copper project and a key component of Teck's future growth.

Second, our innovation-driven business transformation program known as RACE21 continues to advance. We exceeded our initial target