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Canada’s largest diversified miner is feeling the weight of reeling global commodities markets. Vancouver-based Teck Resources Ltd., a major supplier of steel-making coal to China, said on Tuesday that first-quarter profit – adjusted for a one-time charge last year – tumbled 40 per cent, dragged down by falling prices for the metals it produces.
“With continuing uncertain global economic conditions, prices for all of our major products were down compared to the first quarter of last year, resulting in lower profits and cash flows,” Teck president and chief executive officer Don Lindsay said in the company’s statement of results on Tuesday.
Vancouver-based Teck, which produces coal, copper, zinc, molybdenum and some specialty metals, reported adjusted profit of $328-million or 56 cents a share, compared with $544-million or 93 cents in the same period a year ago.
From the first quarter last year to the same period this year, prices for coal, which accounts for 45 per cent of Teck revenue, plunged 28 per cent to $161 (U.S.) a tonne. At the same time, copper prices fell 5 per cent, molybdenum sank 21 per cent and silver dipped 9 per cent.
Cash flow from operations in the first quarter, before working capital changes, was $776-million (Canadian), down from $1.1-billion in the first three months of last year. Revenue for the quarter was $2.33-billion, versus $2.547-billion.
Teck said that “profit attributable shareholders” rose 24 per cent to $319-million or 55 cents a share from $258-million or 44 cents a year earlier. Profit a year ago was affected by a $329-million after-tax charge related to the refinancing of a portion of the company’s debt.
The first-quarter adjusted results beat the expectations of analysts polled by Bloomberg for earnings of 38 cents a share, but that was not enough to defray questions about how Teck might fare if the price panorama worsens further.
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