Download/view Q1 2012 Report (PDF) for the full text of this release.
Excerpt:
Vancouver, BC – Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) reported first quarter adjusted profit of $504 million, or $0.86 per share, up 12% from $450 million in 2011.
“Our strong first quarter results demonstrate continued solid operating performance and the successful execution of our ongoing expansion programs, particularly in coal. Gross profit was similar to the first quarter of 2011, but cash flow from operations was up 14%. Our near-term copper growth projects are on track and, with the acquisition of SilverBirch, we increased our contingent bitumen resources by 67% to 3.5 billion barrels. With a strong balance sheet and strong cash flow, we are well positioned to successfully pursue our longer term growth plans,” said Don Lindsay, President and CEO.
Highlights and Significant Items
- We achieved record first quarter revenues and gross profits of $2.5 billion and $918 million, respectively, in the first quarter of 2012.
- Gross profit before depreciation and amortization of $1.1 billion in the first quarter was similar to the first quarter of 2011.
- Cash flow from operations, before working capital changes, was $1.0 billion in the first quarter of 2012, 14% higher than $874 million a year ago.
- Profit attributable to shareholders was $218 million and EBITDA was $781 million in the first quarter.
- Coal production increased to 6.3 million tonnes in the quarter, up 43% from the first quarter of 2011. This was the result of the successful execution of our ongoing expansion program. In addition, coal production in the first quarter of 2011 was negatively impacted by unusual weather-related events and a strike at our Elkview mine.
- To date we have reached agreements with our coal customers to sell 6.3 million tonnes of coal in the second quarter of 2012 at an average price of US$202 per tonne. We expect to conclude additional sales over the course of the quarter as demand has improved and supplies, particularly from Australia, have been constrained.
- In early April, we closed our acquisition of SilverBirch Energy Corporation (“SilverBirch”) for a net cash outlay of $432 million, which gives us full ownership of the Frontier oil sands project, including the Equinox property. As a result, our total contingent resource for all of our oil sands projects has increased by 67% to 3.5 billion barrels of bitumen.
- Our cash balance was $3.8 billion at March 31, 2012, after dividend payments, capital expenditures, share repurchases and investments totaling $728 million in the first quarter.
- In February we refinanced $1 billion of our high-yield notes, replacing it with debt of longer maturities and lower effective interest rates averaging 4.2%. This refinancing resulted in a $329 million after-tax charge to profit in the quarter and will reduce our annual interest expense by $80 million.
- Our Quebrada Blanca and Carmen de Andacollo copper operations in Chile ratified new collective labour agreements during the quarter.
- On April 23, 2012 we announced that on July 3, 2012 we will pay an eligible dividend of $0.40 per share on our outstanding Class A common shares and Class B subordinate voting shares to shareholders of record at the close of business on June 15, 2012.
Download/view Q1 2012 Report (PDF) for the full text of this release.
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, our future production at our business units and individual operations, profit and cash flow, sales volume and selling prices for our products (including settlement of coal contracts with customers), plans and expectations for our development projects, forecast operating costs, 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 sensitivity of our earnings to changes in commodity prices and exchange rates, the impact of potential production disruptions, the impact of currency exchange rates, future trends for the company, progress in development of mineral properties, increased coal and copper production as a result of our expansion plans, timing of completion and results of our modernization program at Highland Valley, the statements under the heading “Copper Development Projects”, including the anticipated production, results and costs relating to our Quebrada Blanca Phase 2 program, the timing and anticipated production from the reopening of the Quintette coal mine, capital expenditures and mine production costs, unit cost of product for coal, unit transportation costs, demand and market outlook for commodities, future commodity prices and treatment and refining charges, timing of completion of studies on our projects and the impact of measures to manage selenium discharges. 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, interest rates, 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 (including with respect to size, grade and recoverability) 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 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, and changes or further deterioration in general economic conditions.
Statements concerning future production costs or volumes, and the sensitivity of the company’s earnings to changes in commodity prices and exchange rates 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.
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, 2011, filed on SEDAR and on EDGAR under cover of Form 40-F.
Webcast
Teck will host an Investor Conference Call to discuss its Q1/2012 financial results at 11:00 AM Eastern time, 8:00 AM Pacific time, on Tuesday, April 24, 2012. A live audio webcast of the conference call, together with supporting presentation slides, will be available at our website at www.teck.com. The webcast is also available at www.earnings.com. The webcast will be archived at www.teck.com.
Download/view Q1 2012 Report (PDF) for the full text of this release.
Investor Contact:
Greg Waller
Vice-President, Investor Relations and Strategic Analysis
604.699.4014
greg.waller@teck.com
Media Contact:
Marcia Smith
Senior Vice President, Sustainability and External Affairs
604.699.4616
marcia.smith@teck.com
12-17-TR
