Teck Resources Ltd. swung to a loss in the first quarter as crashing oil prices compelled the miner to book a writedown on the value of its stake in the Fort Hills oil sands project.
Vancouver-based Teck said its loss attributable to shareholders was $312 million in the quarter, compared to a profit of $630 million a year earlier.
The company pointed to COVID-19's impact on global commodity prices as a factor, as well as the $474-million after-tax impairment charge tied to Fort Hills as a result of weak Western Canadian Select oil prices and a decision by the mine's owners last month to scale back production.
"The Fort Hills Partners continue to monitor market conditions and may adjust the operating plan for Fort Hills accordingly," Teck said, in reference to the mine's other co-owners, Suncor Energy Inc. and Total E&P Canada Ltd. Last month, Teck CEO Don Lindsay said the ownership consortium had even looked at the possibility of shutting down the mine.
A bright spot for Teck in the first quarter was its steelmaking coal business, with sales reaching 5.7 million tonnes, compared to its March 31 estimate of 5.6 million. However, prices for the commodity were down sharply year-over-year.
Overall, after stripping out exceptional items, Teck said its adjusted quarterly profit amounted to $0.17 per share. Analysts, on average, were expecting $0.16 in adjusted profit per share.
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