Teck Resources reports $232-million Q4 profit, sales down from year ago

VANCOUVER – Teck Resources Ltd. (TSX:TCK.B) reported a $232-million profit in the fourth quarter but said its revenue in the last three months of 2013 was cut by sharp declines in metal and coal prices.

Teck said its net profit for the quarter ended Dec. 31 amounted to 40 cents per share, compared with a profit of $200 million or 34 cents per share a year ago.

However, excluding one-time items, Teck’s adjusted profit of $227 million or 40 cents per share, was down from an adjusted profit of $409 million or 70 cents in the fourth quarter or 2012.

In addition, Teck’s fourth-quarter revenue fell nearly 13 per cent from a year earlier, dropping to $2.38 billion from $2.73 billion.

The Vancouver-based company posted record annual steelmaking coal sales last year and record throughput at three of its mines, Teck president and chief executive Don Lindsay said Thursday.

“However, prices for all of our key products were down compared to last year, resulting in lower profits and cash flows than in 2012,” Lindsay said in a statement.

Copper prices in the fourth quarter were down 10 per cent compared with a year earlier, while coal prices were down 11 per cent.

The price of zinc was down two per cent, silver was down 36 per cent and molybdenum was down nine per cent. Lead was off four per cent.

In its outlook, Teck said while it expects that the longer-term fundamentals for steelmaking coal, copper and zinc are favourable, the recent market weakness may well persist for some time.

The company also noted the recent decline in the loonie’s value has helped the competitiveness of its Canadian operations, but will, to a lesser extent, raise some of the company’s costs.

BMO Capital Markets analyst Meredith Bandy said the results fell short due to higher-than-expected costs, mostly at the corporate level.

“Revenues were actually a bit above expectations and mine-level gross profit was more in line,” Bandy said.

Teck copper revenue totalled $762 million for the quarter, down from $895 million a year ago, while coal revenue was $963 million, down from $1.01 billion. Zinc revenue was $649 million, down from $824 million and energy revenue amounted to $2 million, up from $1 million.

For the full year, Teck earned $961 billion or $1.66 per share on sales of $9.38 billion. That compared with a profit of $1.07 billion or $1.82 per share on sales of $10.34 billion in 2012.

Teck reported a full-year adjusted profit of $1 billion or $1.74 per share, down from $1.78 billion or $3.03 billion in 2012.

Shares in the company closed down $1.86 at $26 on the Toronto Stock Exchange.