News Column

Teck Reports Unaudited Second Quarter Results for 2014

July 29, 2014



ENP Newswire - 29 July 2014

Release date- 25072014 - Vancouver, BC - Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) reported second quarter adjusted profit attributable to shareholders of $72 million or $0.13 per share, compared with $197 million or $0.34 per share in 2013.

Profit attributable to shareholders was $80 million, or $0.14 per share, compared with $143 million, or $0.25 per share, a year ago.

'We are pleased with the performance of our operations this quarter and with our efforts to reduce our costs and capital spending to ensure we emerge stronger from the current challenging price environment, particularly the substantially lower steelmaking coal price that was prevalent in the second quarter of 2014 compared with last year,' said Don Lindsay, President and CEO.

Highlights and Significant Items

Profit attributable to shareholders was $80 million and EBITDA was $558 million in the second quarter.

Gross profit before depreciation and amortization was $633 million in the second quarter compared with $871 million in the second quarter of 2013.

Cash flow from operations, before working capital changes, was $520 million in the second quarter of 2014 compared with $584 million a year ago.

Our cash balance was $2.1 billion at June 30, 2014. We also extended the term of our committed revolving credit facility to July 2019, increasing the amount available by US$1 billion to US$3 billion and providing a total of Cdn$5.3 billion of liquidity.

Our cost reduction program has exceeded our initial goals, with $150 million of annualized reductions realized to date. We are targeting a further $50 million of annualized cost reductions. We are also on target to achieve $150 million of capital expenditure reductions.

We have reached agreements with our quarterly contract customers to sell 5.5 million tonnes of coal in the third quarter of 2014 based on US$120 per tonne for the highest quality product and we expect total sales in the third quarter, including spot sales, to be at or above 6.0 million tonnes.

Throughput increased at 10 of our 13 operations in the second quarter compared with a year ago.

Construction of Trail's new acid plant was completed in May and by June the plant was operating at design rates.

The Pend Oreille zinc mine is being prepared for a restart with first ore expected by December 2014.

We have now completed the mill optimization project at Highland Valley Copper with daily throughput averaging 140,000 tonnes in the second quarter, 10,000 tonnes per day above design capacity.

The Red Dog 2014 shipping season commenced on June 29, 2014 with planned shipments of approximately 1.0 million tonnes of zinc concentrate and 184,000 tonnes of lead concentrate.

We paid a $0.45 per share dividend on our Class A common shares and Class B subordinate voting shares on July 2, 2014.

Cautionary Statement on Forward-Looking Information

This news release contains certain forward-looking information and forward-looking statements as defined in applicable securities laws. All statements other than statements of historical fact are forward-looking statements.

These forward-looking statements, principally under the heading 'Outlook,' but also elsewhere in this document, include estimates, forecasts, and statements as to management's expectations with respect to, among other things, anticipated costs and production at our business units and individual operations and expectation that we will meet our production guidance, sales volume and selling prices for our products (including settlement of coal contracts with customers), plans and expectations for our development projects, expected progress, costs and outcomes of our various projects and investments, including but not limited to those described in the discussions of our operations, the potential savings that may be realized under our cost reduction program, the impact of currency exchange rates, the expected timing of restarting the Pend Oreille zinc operation, expectations regarding third quarter coal sales levels and cost of product sold, as well as the coal annual production targets, our expectation that Antamina will return to higher production in 2014, the amount of our portion of the 2014 expenditures for the Fort Hills oil sands project, the expectation that the Fort Hills oil sands project will provide us with significant cash flows and the life of the project, the Frontier application timing milestones, anticipated capital expenditures, expectations that we have sufficient credit capacity to meet capital commitments and working capital over the next four years, and demand and market outlook for commodities.

These forward-looking statements involve numerous assumptions, risks and uncertainties and actual results may vary materially.

These statements are based on a number of assumptions, including, but not limited to, assumptions regarding general business and economic conditions, the supply and demand for, deliveries of, and the level and volatility of prices of, zinc, copper and coal and other primary metals and minerals as well as oil, and related products, the timing of the receipt of regulatory and governmental approvals for our development projects and other operations, our costs of production and production and productivity levels, as well as those of our competitors, power prices, continuing availability of water and power resources for our operations, market competition, the accuracy of our reserve estimates and the geological, operational and price assumptions on which these are based, conditions in financial markets, the future financial performance of the company, our ability to attract and retain skilled staff, our ability to procure equipment and operating supplies, positive results from the studies on our expansion projects, our coal and other product inventories, our ability to secure adequate transportation for our products, our ability to obtain permits for our operations and expansions, our ongoing relations with our employees and business partners and joint venturers.

The foregoing list of assumptions is not exhaustive. Events or circumstances could cause actual results to vary materially.

Factors that may cause actual results to vary materially include, but are not limited to, changes in commodity and power prices, changes in market demand for our products, changes in interest and currency exchange rates, acts of foreign governments and the outcome of legal proceedings, inaccurate geological and metallurgical assumptions (including with respect to the size, grade and recoverability of mineral reserves and resources), unanticipated operational difficulties (including failure of plant, equipment or processes to operate in accordance with specifications or expectations, cost escalation, unavailability of materials and equipment, government action or delays in the receipt of government approvals, industrial disturbances or other job action, adverse weather conditions and unanticipated events related to health, safety and environmental matters), union labour disputes, political risk, social unrest, failure of customers or counterparties to perform their contractual obligations, changes in our credit ratings, unanticipated increases in costs to construct our development projects, difficulty in obtaining permits, inability to address concerns regarding permits of environmental impact assessments, and changes or further deterioration in general economic conditions.

Our Fort Hills project is not controlled by us and construction, sanction and production schedules may be adjusted by our partners.

Statements concerning future production costs or volumes are based on numerous assumptions of management regarding operating matters and on assumptions that demand for products develops as anticipated, that customers and other counterparties perform their contractual obligations, that operating and capital plans will not be disrupted by issues such as mechanical failure, unavailability of parts and supplies, labour disturbances, interruption in transportation or utilities, adverse weather conditions, and that there are no material unanticipated variations in the cost of energy or supplies.

Statements regarding anticipated coal sales volumes and average coal prices for the quarter depend on timely arrival of vessels and performance of our coal-loading facilities, as well as the level of spot pricing sales.

We assume no obligation to update forward-looking statements except as required under securities laws. Further information concerning risks and uncertainties associated with these forward-looking statements and our business can be found in our Annual Information Form for the year ended December 31, 2013, filed under our profile on SEDAR (www.sedar.com) and on EDGAR (www.sec.gov) under cover of Form 40-F.

Investor Contact:

Greg Waller

Vice President

Tel: 604.699.4014

Email: greg.waller@teck.com

Media Contact:

Marcia Smith

Senior Vice President

Tel: 604.699.4616

Email: marcia.smith@teck.com


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Source: ENP Newswire


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