Teck Resources Limited (TECK) Cash Flow Statement

The OCF/NI ratio of 1.76 in 2026Q2, up from 0.43 a year earlier, indicates that reported earnings are increasingly backed by cash generation, a reversal from the negative conversion seen in 2025Q1. This improvement appears driven by the copper segment's lower capital intensity and better working capital management, though the 2026Q1 negative working capital swing of -$834M warrants monitoring for volatility.

The FCF margin expanded from -39.7% in 2025Q1 to 20.1% in 2026Q2, reflecting both higher copper prices and lower capital intensity as QB2 reaches steady state. This trajectory suggests the company is transitioning from a heavy investment phase to a harvest phase, though the sustainability depends on copper prices and continued operational stability.

The sharp decline in capital intensity, from 67.5% to 21.6% over eight quarters, suggests that the major growth capex for QB2 is largely complete, allowing more cash to flow to shareholders. However, sustaining capital for the expanded asset base will likely remain elevated, and investors should monitor whether future capex aligns with the lower levels seen in recent quarters.

The large negative working capital changes in 2026Q1 and 2025Q1 likely reflect timing of shipments and price movements, while the positive swing in 2024Q4 suggests collections caught up. This volatility is typical for miners with concentrated customer bases and commodity price exposure, but it can distort quarterly cash flow comparisons.

The consistent dividend, despite negative FCF in some quarters, suggests a commitment to shareholder returns, funded by the balance sheet and coal sale proceeds. Buybacks of $144M in 2025Q3 and $487M in 2025Q2 indicate a shift toward returning excess cash, though the pace may be tempered by ongoing capital needs and the desire to maintain a fortress balance sheet.

The persistent gap between OCF and net income, with OCF/NI ratios often above 1.5, indicates that depreciation and amortization are significant non-cash charges, particularly from the coal and copper assets. This divergence suggests that reported earnings understate the company's cash-generating ability, a positive signal for valuation, though it also reflects the capital-intensive nature of the business.