Teck’s bottom line benefits from low loonie

Selling in U.S prices while paying operating costs in Canadian dollars helps Teck's bottom line.

The loonie fell below the 70-cent U.S. mark for the first time in 13 years and in its wake, the rapidly dropping dollar is leaving a roster of losers, but this doesn’t include Teck Resources.

The Canadian metals and mining company credits the low Canadian dollar for helping weather the downturn in commodity prices, with the company able to sell its copper and coal at U.S. prices while paying operating costs in Canadian.

“The stronger U.S. dollar has a positive benefit on Teck’s business as sales of our products are denominated in U.S. dollars,” confirmed Catherine Adair, community relations leader at Trail Operations.

She points to Teck’s fourth-quarter 2014 news release, which notes every 1¢ change in the Canadian dollar/U.S. dollar exchange rate affects the company’s earnings before interest taxes, depreciation and amortization (EBITDA) by $52 million (based on $1.20 CAD/USD and budgeted commodity prices).

“The effect on Teck’s profit and EBITDA will vary with commodity price and exchange rate movements and commodity sales volumes,” she notes. “We will be releasing revised Canadian/U.S. dollar exchange data when we issue our Q4 2015 news release in February.”

After the recovery from the 2008 crash, Teck shares climbed to an estimated $60 in 2011. Since then, the charts have changed course with values dipping under $4.30 at closing Thursday.

With files from Canadian Press.