OTTAWA (dpa-AFX) - Canadian mining company Teck Resources Ltd. (TCK, TCK_A.TO, TCK_B.TO) reported Tuesday a decline in first-quarter profit, reflecting a charge related to refinancing of a portion of its debt. Adjusted profit increased from last year, helped by a significantly higher contribution from coal business unit and increased copper sales. However, adjusted earnings and revenues missed analysts' expectations.
The company stated that it continues to experience volatile markets for its products, which can have a substantial impact on its business. Also, the uncertain economic conditions in Europe is likely to affect both prices and shipments to its customers, it added.
Revenues from copper business unit in the recent quarter remained unchanged from last year, as higher sales volumes were offset by lower copper prices. Coal revenues increased $179 million due to higher realized coal prices and a 7 percent increase in sales volumes.
Don Lindsay, president and CEO of the company said, 'Our strong first quarter results demonstrate continued solid operating performance and the successful execution of our ongoing expansion programs, particularly in coal...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.'
In the first quarter, profit attributable to shareholders more than halved to C$218 million from C$461 million in the previous year. On a per share basis, earnings were C$0.37, down from C$0.78 per share a year ago.
Profit attributable to shareholders in the first quarter was also affected by a C$329 million after-tax charge related to the refinancing of a portion of debt, the company said.
Adjusted profit increased to C$504 million or C$0.86 per share from C$450 million or C$0.76 per share in the prior-year quarter. On average, 16 analysts polled by Thomson Reuters expected the company to earn C$0.88 per share for the quarter. Analysts estimates typically exclude special items.
Revenues for the quarter grew to C$2.55 billion from C$2.37 billion a year ago, but was below analysts' consensus estimate of C$2.6 billion.
Coal production increased to 6.3 million tonnes in the quarter, up 43 percent from the preceding year. The company noted that the prior-year quarter's coal production was negatively impacted by unusual weather- related events and a strike at its Elkview mine. Gross profit before depreciation and amortization from coal business unit in the recent quarter increased C$168 million, helped by an 8 percent increase in coal prices, increased sales volumes and lower unit costs.
Copper sales volumes increased 14 percent due to higher production levels and timing of shipments. Meanwhile, gross profit before depreciation and amortization from copper business unit decreased by C$103 million, mainly as a result of a 14 percent decline in copper prices and other by-product prices.
Teck Resources also said that prices for key products in its metal units strengthened during the first quarter.
TCK closed Monday's regular trading at $35.69 on the NYSE.
TCK-A.TO ended on Monday at C$36.95 on the Toronto Stock Exchange, while, TCK-B.TO finished at C$35.33.
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