How Teck Resources (NYSE: TCK) has turned its fortunes around.
It only seems yesterday that the Canadian mining giant was up against the ropes, having fuelled the acquisition of Fording Canadian Coal Trust through debt at the peak of the commodity boom, only to see commodity prices and debt markets implode later in 2008. During the financial crisis Teck Resources was one of the hardest hit stocks, getting hammered for its high debt levels at a time when commodity prices were sharply retreating.
Skip forward to 2011 and it is a completely different story to be told. This evening the company reported record revenues, record operating profits and increases in both copper and coal production.
Adjusted earnings jumped 36% in 2010 to $1.5 billion, or $2.62 per share, while fourth quarter earnings surged 76% to $548 million, or 93 cents per share. EBITDA in the final quarter of 2010 hit $1 billion, taking the full year number to $4.3 billion, on fourth quarter revenues of $2.8 billion and full year revenues of $9.3 billion. Cash flow from operations hit an impressive $2.7 billion, underlying just how strongly Teck has capitalized on its position in coal, copper and other metals.
"There is further growth ahead of us as each of Teck Coal, Andacollo, Antamina and Highland Valley Copper increase production. Our balance sheet was significantly strengthened as a result of a further $3.1 billion reduction in our debt and through our refinancing we significantly reduced our interest costs,” Don Lindsay, President and CEO of Teck stated.
Copper production during 2010 hit 313,000 tonnes, up from 308,000 tonnes in 2009, while coal production rose 22% to 23.1 million tonnes. Teck is also a key player in zinc production, and has significant exposure to Alberta`s oil sands industry.