Teck Cominco Ltd. (TSX:TCK.B) reported a 59% drop in annual profit to $659 million in 2008 from $1.6 billion a year earlier despite enjoying higher revenue.
A $589 million asset impairment charge and a $700 million increase in operating expenses were main contributors to the drop.
Despite a steep decline in commodity prices in the latter half of 2008, Teck increased its annual revenue to $6.9 billion from $6.3 billion. The increase was due to higher coal revenue from its $13.8 billion acquisition of Fording Canadian Coal Trust. Coal revenue of $2.4 billion offset much of the decline in operating profit from Teck's copper and zinc divisions. Operating profit for copper fell to $882 million from $1.3 billion, while operating profit for zinc fell to $301 million from $1.2 billion.
Teck did not provide an outlook for the year given the usually high uncertainty in the commodity and financial markets caused by a deepening global recession. It did note, however, that a 1% change in coal prices will have at least a $21 million impact on the company's earnings.
Teck's share price during the past week: between $4.92 and $5.50; 52-week high: $52.90; 52-week low: $3.35.