Teck Resources Ltd. (TSX:TCK) announced third quarter profits of $252 million ($0.44 per share) October 24 – a 40% drop compared with Q3 2012’s profits of $425 million ($0.73 per share).
The dip in profits was the result of lower prices for all of Teck’s principal products. Coal prices dropped 28%, and copper prices declined 8%. Coal production was up 6% compared with the same period last year, and the company set a new quarterly sales record of 7.6 million tonnes.
Copper production was down due to reduced throughput at Quebrada Blanca and lower grades at most of the company’s mines.
“We are pleased with our operating performance this quarter,” said Teck president and CEO Don Lindsay. “Our steelmaking coal sales of 7.6 million tonnes set a quarterly record and demand from customers is strong.
“However, the current price for steelmaking coal remains below what we believe is required to sustain adequate production in the industry in the long term.”
Teck said it has reached agreements with its coal customers to sell 5.6 million tonnes in Q4 at an average price of US$145 per tonne. Total sales, including spot sales, are anticipated to be 6.3 million tonnes.
The company said it will focus on cost-cutting in the fourth quarter.
“With the current market conditions, our near term efforts are focusing on our $330 million cost-reduction program, reducing our sustaining capital spending and reviewing the timing of our various development projects.”
