Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) ("Teck") reported second quarter adjusted profit of $197 million, or $0.34 per share, compa
Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) ("Teck") reported second quarter adjusted profit of $197 million, or $0.34 per share, compared with $398 million or $0.68 per share in 2012.
"We are pleased with our operating performance this quarter and have made good progress on our cost reduction program. However, prices for our products have continued to weaken, particularly steelmaking coal. We continue to adapt to changing market conditions and are taking steps to further reduce our capital spending, slowing the start of our Quintette mine reopening and delaying the development of Quebrada Blanca Phase 2. In addition, we are reducing our sustaining capital expenditures and increasing the targets for our cost reduction program," said Don Lindsay, President and CEO.
- Gross profit before depreciation and amortization was $871 million in the second quarter compared with $1.1 billion the second quarter of 2012.
- Cash flow from operations, before working capital changes, was $584 million in the second quarter compared with $874 million a year ago.
- Profit attributable to shareholders was $143 million and EBITDA was $670 million in the second quarter.
- Their cash balance was $2.8 billion at June 30, 2013.
- Their cost reduction program has exceeded the initial goals, and to date their existing operations have identified over $250 million of annual ongoing potential cost savings at constant production levels and have implemented $220 million of these initiatives. They have recently revised target savings to $300 million.
- The Quebrada Blanca operations returned to profitability in the second quarter as a result of initiatives to reduce workforce and operating costs.
- They are taking steps to reduce capital spending in light of market conditions, slowing the start of the Quintette mine reopening and delaying development of the Quebrada Blanca Phase 2 expansion project.
- To date they have reached agreements with coal customers to sell 6.4 million tonnes of coal in the third quarter of 2013 at an average price of US$143 per tonne. They expect to conclude additional sales over the course of the quarter.
- They paid a $0.45 per share dividend on the Class A common shares and Class B subordinate voting shares on July 2, 2013.
This management's discussion and analysis is dated as at July 25, 2013 and should be read in conjunction with the unaudited consolidated financial statements of Teck Resources Limited (Teck) and the notes thereto for the three months ended June 30, 2013 and with the audited consolidated financial statements of Teck and the notes thereto for the year ended December 31, 2012. In this news release, unless the context otherwise dictates, a reference to "the company" or "us," "we" or "our" refers to Teck and its subsidiaries. Additional information, including our annual information form and management's discussion and analysis for the year ended December 31, 2012, is available on SEDAR .
