Investors give Teck a boost following record coal sales
Teck Resources (NYSE:TCK) appears to have impressed investors with its Q3 results as the share price rose more than 4% on Thursday.
Canada's biggest diversified miner hit record coal sales of 7.6 million tonnes this quarter, leading to a significant jump in profit compared with this year's Q2.
Trading at $30.74 per share, Teck has hit a six-month high, though it's still showing a 21% drop year-to-date.
The mining giant reported Q3 2013 adjusted profit of $252 million, $0.44 per share. Although an improvement on the previous quarter's results of $197 million, this is still far below the $425 million the company raked in during last year's third-quarter.
Coal sales were up 36% and the company expects fourth-quarter sales of at least 6.3 million tonnes.
CEO Don Lindsay said in a statement that he was "pleased" with the results.
Despite the encouraging numbers, Teck is still tightening the purse strings. The company has already slashed $300 million in costs this year. Exploration spending has been reduced by 15%.
"The current price for steelmaking coal remains below what we believe is required to sustain adequate production in the industry in the long term," Lindsay said in a statement. "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.”
During the same period last year, Teck was selling coal at an average price of $163 per tonne. The average price in Q4 2013 sales agreements is $145 per tonne.
As for copper, prices were down 8% compared with Q3 2012. Gross profit from copper slid by $74 million – a figure partly offset by a $48 million boost in zinc sales.