Download/view Q1 2013 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 $328 million, or $0.56 per share, compared with $544 million in 2012.
“I'm pleased with our performance so far this year," said Don Lindsay, President and CEO. “Sales of steelmaking coal were up 24% over the first quarter of 2012, a new record for first quarter sales, while sales volumes for copper and zinc were similar to last year despite various operational challenges. However, with continuing uncertain global economic conditions, prices for all of our major products were down compared to the first quarter of last year resulting in lower profits and cash flows.”
Highlights and Significant Items
- Gross profit before depreciation and amortization was $994 million in the first quarter compared with $1.2 billion in the first quarter of 2012.
- Cash flow from operations, before working capital changes, was $776 million in the first quarter of 2013 compared with $1.1 billion a year ago.
- Profit attributable to shareholders was $319 million and EBITDA was $902 million in the first quarter.
- We achieved all-time record first quarter coal sales of 6.6 million tonnes despite relatively weak market conditions and shipping constraints due to repairs at Westshore terminals, which continued into early February.
- To date we have reached agreements with our coal customers to sell 5.4 million tonnes of coal in the second quarter of 2013 at an average price of US$154 per tonne and expect total sales in the second quarter, including spot sales, to be at or above 6.0 million tonnes.
- Our cash balance was $2.95 billion at March 31, 2013, after dividend payments, share repurchases, capital expenditures and investments totaling approximately $1.0 billion in the first quarter.
- Our cost reduction program has exceeded our initial goals, and to date our existing operations have begun the implementation of annualized cost savings and expenditure deferrals of $275 million in 2013.
- Our finance expense was down 40% from a year ago, primarily as a result of the full benefit of our debt refinancing transactions undertaken last year, which reduced our average interest rate to 4.8% from 7.5%.
- The effect of the new accounting standards for waste removal costs increased profit attributable to shareholders by $53 million, or $0.09 per share, in the first quarter of 2013 compared with previous accounting standards.
- On April 15 we received an Area Based Management Plan Order from the British Columbia Ministry of the Environment, providing clarity around watershed protection and mining activities in the Elk Valley. We consider this a positive step that will provide a regulatory basis to deal with effects of mining on water quality in the Elk Valley and will establish a regulatory context for permitting of future mining activity.
Download/view Q1 2013 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, 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, including resulting increases in forecast operating costs and costs of product sold, expected production, 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 sensitivity of our profit 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 mill optimization project program at Highland Valley Copper, head grade expectations for Antamina, statements under the heading “Copper Development Projects,” including the expected timing of re-filing the SEIA for Quebrada Blanca Phase 2, the timing of the feasibility study and drilling for Relincho, statements under the heading “Coal” regarding expected first quarter sales levels, cost of product sold, annual transportation costs and depreciation and amortization expense, the timing of permit approval, production and anticipated costs and production levels from the Quintette coal mine, timing and results of the Neptune Bulk Terminals coal throughput capacity expansion, the impact of measures to manage selenium discharges and costs and spending related thereto, timing of construction of our new acid plant at Trail, the statements under the heading “Energy” regarding timing of project sanction and approval decisions, production permitting decisions, timing of final supplemental information requests on our Frontier project and our responses the review process on Frontier thereto, anticipated capital expenditures 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 (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. Statements concerning our selenium management plan are based on the assumptions, and subject to the factors, described under “Coal - Selenium Management.” 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 partner.
Statements concerning future production costs or volumes, and the sensitivity of the company’s profit 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. 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, 2012, filed under our profile on SEDAR and on EDGAR under cover of Form 40-F.
Webcast
Teck will host an Investor Conference Call to discuss its Q1/2013 financial results at 11:00 AM Eastern time, 8:00 AM Pacific time, on Tuesday, April 23, 2013. 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 2013 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
13-11-TR
