Teck Resources Ltd. (TSX:TCK) reported a better-than-expected adjusted profit of $159 million for the three months ended September 30, 2014 – a 37% drop compared with $252 million same period last year – the company announced October 29.
A drop in steelmaking coal prices was one reason for the decrease, the company said, explaining that coal prices were US$29 per tonne lower than last year. Customer demand for coal remains “robust,” said the miner, although volumes were down from last year’s record 7.5 million tonnes to 6.7 million this quarter. The company said it expects sales to drop to 6.5 million tonnes in Q4.
Revenue fell 11% to $2.25 billion from $2.52 billion last year.
Copper business profits were down due to decreased production, particularly at the company’s Antamina project.
Year-to-date revenue was down 9% from $7.0 billion to $6.3 billion.
The drop in the Canadian dollar has had a positive effect on the company’s bottom line, with each $0.01 change in the rate giving affecting EBITDA by $60 million per year.
“Sales of our products are denominated in U.S dollars, while the majority of our operating and capital costs are incurred in Canadian dollars,” the company said in its quarterly release. “The stronger U.S. dollar will, to a lesser extent, put upward pressure on a portion of our operating costs and capital spending.”
Don Lindsay, president and CEO, said the company feels optimistic about its progress at its Fort Hills oil sands project and the reopening of its Pend Oreille zinc mine.
As of press time, shares of Teck were trading at $19.95 – an increase of 3.42%.
