Teck Reports Unaudited Third Quarter Results for 2012
Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) reported third quarter adjusted profit of $349 million, or $0.60 per share, compared with $742 million or $1.26 per share in 2011.”The uncertainty in global economic conditions resulted in lower commodity prices and sales volumes of steelmaking coal compared with the third quarter of 2011. This resulted in profits and cash flow from operations being less than the third quarter of last year. However, our quarterly operating results continued to be strong with another quarterly record for copper production at 99,000 tonnes, up 29 percent from the third quarter of last year.
Our balance sheet remains strong, with a cash balance of $4.2 billion and we are well positioned to continue with our growth plans. Notwithstanding our strong financial position, some of our planned capital spending has been deferred for a variety of reasons and we have also implemented a cost reduction program,” said Don Lindsay, President and CEO.
Gross profit before depreciation and amortization was $933 million in the third quarter compared with a record $1.8 billion in the third quarter of 2011.
Cash flow from operations, before working capital changes, was $741 million in the third quarter compared with a record $1.3 billion a year ago.
Profit attributable to shareholders was $180 million and EBITDA was $721 million in the third quarter.Teck says, “To date we have reached agreements with our coal customers to sell 6.2 million tonnes of coal in the fourth quarter of 2012 at an average price of US$163 per tonne. We expect to conclude additional sales over the course of the quarter.In August, Teck issued US$1.75 billion of long-term notes with an effective average interest rate of 4 per cent. A portion of the notes refinanced US$660 million of its high-yield notes, which resulted in an after-tax charge of $196 million in the quarter. About $1.5 billion of expected capital spending is being deferred from Teck’s original 2012 and 2013 capital budgets, which includes: reduced capital spending for Quebrada Blanca Phase 2 and Quintette due to permitting delays for each project, a delay in the Relincho project as a result of external factors related to power and port facilities, a delay in the development of Fort Hills as Teck’s partner updates the design basis for the project, and a deferral of the construction of the Number 4 slag fuming furnace at Teck’s Trail Operations.During the quarter, Teck reduced its coal production to align with declining market demand. However, they expect their annual production will meet the lower end of their guidance of 24.5 million tonnes for 2012.