Try AgainTeck Cominco earns $241-million in first quarter
2009-04-21 06:19 ET - News Release
Mr. Don Lindsay reports
TECK REPORTS FIRST QUARTER RESULTS FOR 2009
Teck Cominco Ltd.'s net earnings were $241-million, or 50 cents per share, in the first quarter. Earnings before non-recurring items and positive pricing adjustments were $227-million and the company's operating profit, before depreciation and pricing adjustments, was $765-million. At March 31, 2009, the company's cash balance was $1.6-billion.
"General economic conditions have improved somewhat in the first quarter of the year, but we are still operating in challenging times," said Don Lindsay, president and chief executive officer. "Our operations performed well, with all of our major sites generating positive cash flow from operations in the quarter. We are also making progress with our debt reduction plan and our non-core asset sales."
Highlights and significant items:
- Revenues in the first quarter were $1,708-million, up 11 per cent from $1,542-million in 2008. Operating profit before depreciation and pricing adjustments was $765-million, up 29 per cent from $594-million in 2008.
- It is difficult to forecast coal sales volumes at this stage in the economic cycle and their effect on results for the coming year is uncertain at this time. Currently, the company expects its 2009 coal sales to be between 18 million and 20 million tonnes, 90 per cent of which is expected to be hard coking coal. Actual volumes will depend on developments in global steel markets. To date, the company has concluded price negotiations for approximately 11 million tonnes of coal for the 2009 coal year, with its highest-quality coal products being priced at $128 (U.S.) per tonne. Negotiations with the rest of its customers are continuing. In addition, it has several customer commitments to accept delivery of 1.6 million tonnes of carry-over tonnage at 2008 coal year prices. Negotiations on the remaining carry-over tonnage are also continuing.
- In the first quarter, the company sold its investments in the Lobo-Marte gold property in Chile and its indirect interest in Sociedad Minera El Brocal SAA. The company realized cash proceeds of $141-million (U.S.) and $35-million (U.S.) respectively for these sales, of which $101-million (U.S.) was received in April.
- The company has announced the sale of its 50-per-cent interest in the Hemlo gold mines for $65-million (U.S.). The company expects the transaction to close in the second quarter of 2009.
- The company also announced the sale of a royalty interest in respect of Andacollo's gold production, which is expected to close in the second quarter of 2009.
- To date, the company has received approximately $980-million of its expected tax refunds of $1.1-billion arising from its acquisition of the coal assets from Fording.
- The company is also in advanced negotiations with lenders to amend the terms of the bridge and term loans related to the Fording acquisition.
- In the first quarter of 2009, Moody's Investor Services and Standard & Poor's lowered its credit ratings to Ba3 and BB+ respectively, both with a negative outlook.
CONSOLIDATED STATEMENTS OF EARNINGS
(in millions, except for share data)
For the three months
ended March 31,
2009 2008
Revenues $ 1,708 $ 1,542
Operating expenses (873) (826)
-------- --------
835 716
Depreciation and amortization (199) (105)
-------- --------
Operating profit 636 611
Other expenses
General and administration (31) (30)
Interest and financing (137) (20)
Exploration (11) (19)
Research and development (6) (8)
Other income (expense) (69) 4
-------- --------
Earnings before the undernoted items 382 538
Provision for income and resource taxes (141) (176)
Non-controlling interests (11) (27)
Equity earnings (loss) (1) 9
-------- --------
Net earnings from continuing operations 229 344
Net earnings from discontinued operations 12 1
-------- --------
Net earnings $ 241 $ 345
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Earnings per share
Basic $ 0.50 $ 0.78
Basic from continuing operations $ 0.47 $ 0.78
Diluted $ 0.50 $ 0.78
Diluted from continuing operations $ 0.47 $ 0.77
We seek Safe Harbor.