Resource News

Teck Resources racks up record revenue

After being left for dead in the fourth quarter of 2008, Teck Resources Ltd. delivered one of its best-ever fourth quarters in 2009.

Last night, the Vancouver-based company said it earned $411-million (or 70¢ a share) in Q4 on record revenue of $2.2-billion. For the full year, Teck earned $1.8-billion, its second-highest total ever.

“Our record revenues this year reflected strong performance across the company, including record production of copper at Quebrada Blanca and zinc at both [the] Red Dog and Antamina [mines],” chief executive Don Lindsay said in a statement.

The results conclude the remarkable turnaround that Teck delivered in 2009 after it came close to utter financial collapse.

Teck’s problems began when it completed the $14-billion takeover of Fording Canadian Coal Trust at the worst possible time, just as commodity prices crashed amid the global financial crisis in the fall of 2008. The transaction left the company with nearly US$10-billion in new debt, and forced it into survival mode.

Mr. Lindsay rescued the company from potential disaster by selling assets, getting extensions on Teck’s debt obligations, and completing a record-breaking US$4.225-billion bond sale.

Those moves, along with a rebound in commodity prices, made Teck an investor darling once again.

Following the sale of its interest in the Waneta Dam asset, Mr. Lindsay said Monday that it will have reduced its total debt by $6.7-billion since completing the Fording transaction.

In the fourth quarter, the most dramatic year-over-year improvements came in the company’s copper and zinc divisions, which benefited from much higher pricing. The copper unit had revenue of $664-million compared with $145-million in the prior year, while the zinc business had revenue of $693-million compared with $392-million the year before.

The earnings came out a day after Teck’s largest shareholder, China Investment Corp., revealed that its interest in Teck shares was worth US$3.54-billion at the end of 2009. The sovereign wealth find paid US$1.5-billion for the 17.5% interest last July, just as Teck shares were in the midst of a huge rally…read more at the Financial Post