This news release is dated as at February 7, 2013. Unless the context otherwise dictates, a reference to "Teck," "the company," "us," "we," or "our" refers to Teck and its subsidiaries. Additional information, including our annual information form and management's discussion and analysis for the year ended December 31, 2011, is available on SEDAR at www.sedar.com.
This document contains forward-looking statements. Please refer to the cautionary language under the heading "CAUTIONARY STATEMENT ON FORWARD-LOOKING INFORMATION" below.
Overview
We met our production targets for both the quarter and the year for all of our major products. In doing so we also reduced our coal unit costs and took significant steps in our announced cost reduction program to reduce operating costs at all operations. Unfortunately, weakness in steelmaking coal markets had a significant negative effect on prices and, to a lesser extent, volumes and our coal business was less profitable as a result. However, our gross profit was higher than the previous quarter, helped by stronger results in copper and the seasonality of zinc and lead sales from Red Dog.
During the quarter we completed the redemption of our remaining high-yield notes and recorded a $259 million after-tax charge on the redemption. We view the redemption as a positive step that will result in significantly lower interest charges going forward. Debt due before the end of 2016 is now approximately US$325 million.
In project development, we continue to make good progress on the mill modernization at Highland Valley Copper, the acid plant project at Trail and the advancement of our new mine development projects. We maintain a strong balance sheet in order to fund this internal growth.
We increased our distributions to shareholders, raising our semi-annual dividend to $0.45 per share and buying back 3.8 million Class B subordinate voting shares at a cost of $123 million.
We were also pleased to be named to the top 100 most sustainable companies at the world economic forum in Davos, placing highest among Canadian companies. We believe our commitment to sustainability provides us with a competitive advantage in developing and operating mines throughout the world.
Profit and Adjusted Profit(i)
Adjusted profit, which excludes the effect of our debt refinancing and certain other transactions as described in the table below, was $354 million, or $0.61 per share, in the fourth quarter of 2012 compared with $613 million, or $1.04 per share, in the same period a year ago.
Our lower adjusted profit was primarily due to a 37% decline in our realized steelmaking coal prices in the fourth quarter compared with the same period a year ago. This was despite higher sales volumes. Partly offsetting the decline in our coal business unit were higher contributions from our copper business unit as a result of increased production levels. Profit attributable to shareholders in the fourth quarter was affected by a $259 million after-tax charge related to the refinancing of our remaining high-yield notes, which is excluded from adjusted profit. This transaction reduced interest costs in the fourth quarter and will result in further interest savings going forward.
Profit attributable to shareholders was $145 million, or $0.25 per share, in the fourth quarter compared with $637 million or $1.08 per share in the same period last year.
Three months ended Year ended December 31, December 31,($ in millions) 2012 2011 2012 2011----------------------------------------------------------------------------Profit attributable to shareholders as reported $ 145 $ 637 $ 811 $ 2,668Add (deduct): Asset sale loss (gains) 4 (1) (39) (146) Foreign exchange (gains) losses (1) (14) 20 (4) Derivative gains (3) (61) (98) (128) Collective agreement charges 11 29 70 55 Financing items 259 - 784 - Asset write-downs - 23 - 23 Tax items (61) - (29) - ----------------------------------------Adjusted profit $ 354 $ 613 $ 1,519 $ 2,468 ----------------------------------------Adjusted earnings per share $ 0.61 $ 1.04 $ 2.60 $ 4.18 ----------------------------------------
