Teck profits slip in third quarter, still generated $267 million in profit for shareholders

Teck Resources Limited (TSX: TCK.A and TCK.B, NYSE: TCK) ("Teck") reported third quarter adjusted profit of $252 million, or $0.44 per share, compared with $425 million or $0.73 per share in 2012.

"We are pleased with our operating performance this quarter," said Don Lindsay, president and CEO. "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. 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."

Highlights and Significant Items

• Coal sales in the third quarter were a record 7.6 million tonnes, up 36% from a year ago. 
• Gross profit before depreciation and amortization was $919 million in the third quarter compared with $1.1 billion the third quarter of 2012.
• Cash flow from operations, before working capital changes, was $647 million in the third quarter compared with $885 million a year ago. 
• Profit attributable to shareholders was $267 million and EBITDA was $815 million in the third quarter. 
• Our cash balance was $2.3 billion at September 30, 2013. 
• We continue to implement our cost reduction program and to date our existing operations have identified over $330 million of annual ongoing potential cost savings at constant production levels and have implemented $300 million of these initiatives. 
• To date we have reached agreements with our coal customers to sell 5.6 million tonnes of coal in the fourth quarter of 2013 at an average price of US$145 per tonne and expect total sales in the fourth quarter, including spot sales, to be at or above 6.3 million tonnes.
• Coal cost of sales before transportation costs declined to $50 per tonne in the third quarter compared with $58 per tonne a year ago. 
• We received the British Columbia Environmental Assessment Certificate for our Line Creek Phase 2 project which will maintain production and extend the mine life by 18 years. 
• We reached an agreement to purchase approximately 7,150 hectares of private land in the Elk and Flathead valleys of British Columbia for $19 million, in order to protect key wildlife and fish habitat. These lands, in combination with ongoing reclamation work at our operations, will help us to achieve our sustainability goal of creating a net-positive impact on biodiversity.
• We were named to the Dow Jones Sustainability World Index ("DJSI") for the fourth straight year, indicating that our sustainability practices rank in the top ten percent of the world's 2,500 largest public companies.