Teck Resources CEO steps down, Kinross Gold reports $11.9m loss and CN Rail surcharges pay off
Teck Resources (TSX: TECK.A, TECK.B) has announced long-serving chief executive officer Don Lindsay is stepping down from the role, while agreeing to a transition role as executive vice chairman until mid-2023.
The news was announced as Teck reported a fourth consecutive quarter of record profits.
Teck’s revenue for the three months ended 30 June was $5.79 billion, up from $2.56 billion in the previous year.
Mr Lindsay said the company’s impressive results were a pay-off of its strategy to build up the company’s resource base, and its culture.
“These results really speak to the strength of not just Teck’s assets, and certainly commodity prices were a big contributor, but also to the strength of the incredible team of people that we have here,” he said.
He added the timing was right to transition the leadership role going forward.
“We are reshaping and rebalancing our portfolio to have a bigger focus on copper and less on carbon,” he said.
“With that shift to a new phase of growth at Teck, it is important to shareholders in particular, that the strategy is owned and led by the CEO who will be around and accountable for it in the longer term.”
Jonathan Price, the company’s current chief financial officer will take over as chief executive officer at the conclusion of Mr Lindsay’s tenure.
Kinross Gold
Kinross Gold (TSX: K) has reported a net loss of US$9.3 million (C$11.9 million) in the second quarter, blaming a decrease in operating earnings, along with an increase in income tax expenses.
The Toronto-based company reported net earnings of US$30.1 million (C$38.5 million).
It earned US$37.4 million (C$47.84 million) in the three months ending 30 June, compared to US$66.5 million (C$85 million) in the same quarter of the previous year.
As a result of inflation, production cost of sales from continuing operations increased during the quarter to US$1,027 (C$1,313) per gold equivalent ounce sold, up from US$850 (C$1,087) reported in the second quarter of 2021.
The company suggested cost of sales per ounce sold will decrease in the second half as operations at its lowest cost mines Tasiast, Paracatu and La Coipa will see stronger production.
TC Energy
TC Energy’s (TSX: TRP) Coastal GasLink pipeline cost estimate has leaped 70% to $11.2 billion after the company resolved a long-standing dispute with LNG Canada over the 670-kilometre pipeline.
Its new cost estimate of $11.2 billion over the pipeline increases from the original $6.6 billion.
The Coastal GasLink pipeline will ship natural gas from the Dawson Creek area in northeastern British Columbia to an export facility in Kitimat.
TC Energy chief executive officer François Poirier said the disputes have been settled as revised agreements.
“The agreements resolve uncertainty over specific and anticipated costs, mitigate project funding and execution risks and allow us to continue the safe and timely execution of the project,” he said.
“We continue to believe the project remains economically viable and, subject to a final investment decision, we anticipate a potential second phase of Coastal GasLink could enhance TC Energy’s project returns.”
Weather and COVID-19 are believed to be contributors to the change in cost estimate, as well as to an increased scope of the project.
TC Energy, who obtain an ownership stake of 35% in the pipeline, said Coastal GasLink is at 70% completion and is set to be in service by the end of next year.
Cenovus Energy
As inflation continues to soar to record heights across the globe, Cenovus Energy’s (TSX: CVE) chief executive officer Alex Pourbaix has urged inflation has been “manageable” for the company, but is something that can’t be ignored.
Despite feeling increased inflationary pressure on items such as drilling and fracking rigs, drilling pipe casing and completion rigs, Mr Pourbaix said inflation isn’t going to drastically change the company’s decisions and plans in the near future.
“Most of our activities are really planned out and staged years in advance,” he said.
“We’re seeing escalation of costs up towards that 10% range.”
“My challenge to the team is always to try to find a way to eat inflation or make up for inflation. Some years we’re able to do that … next year might be a bit of a challenge,” he added.
The Calgary-based company’s oil sands business is operating without a worry, due to the contractors being on long-term contracts and materials being procured well in advance.
Mr Pourbaix said the company performed well despite a period of planned interruptions and maintenance.
“We’re well positioned for even better performance in the second half of the year as our assets return to operating at normal rates across the portfolio,” he said.
Cenovus’ revenue for the three months ended 30 June was $19.2 billion, up from $10.58 billion in the corresponding quarter of 2021.
Canadian National Railway
Canadian National Railway (TSX: CNR) has announced it was able to combat rising costs and inflationary pressures through increasing prices and fuel surcharges as the company reported strong earnings for the quarter.
For the second quarter, revenue was recorded as $4.34 billion, up 21% on the same quarter in the previous year.
Increasing rates and fuel charges, strong volumes of coal and US grain and a weaker Canadian dollar were all attributed to the revenue results.
Canadian National Railway chief executive officer Tracy Robinson said the results are extremely encouraging under the new leadership.
“I am really encouraged with the start that we have,” she said.
“I feel more excited about the future of CN.”
For the second quarter, revenue from freight per carload increased 21% to last year’s comparative period, with the company being able to run the same amount of trips with less employees.