Teck Resources reports surprise profit helped by cost cuts
(Reuters) - Canadian miner Teck Resources Ltd TCKb.TO TCK.N reported a surprise quarterly profit as cost-cutting measures and a weak Canadian dollar helped cushion the impact of lower coal and copper prices.
The global commodity rout has pushed coal and copper prices to multi-year lows, forcing miners to sell assets, lay off workers, and cut dividends and capital spending to preserve cash and reduce debt.
However, a strong U.S. dollar has helped Teck, which sells commodities in the U.S. currency but incurs expenses in local currencies, particularly the Canadian dollar.
Teck, the largest producer of steel-making coal in North America, said on Tuesday it expected coal sales to exceed 6.5 million tonnes in the current quarter.
The company said the construction of the Fort Hills oil sands project in northern Alberta is more than 55 percent complete and was on track for first oil production by late 2017.
The company had earmarked C$2.9 billion for the project, of which about C$1 billion remains to be spent as of April 25, the company said.
A prolonged slump in oil prices has resulted in a number of oil projects being deferred, but Fort Hills is one of the projects that is expected to be completed because of the investments already made.
Teck owns a 20 percent stake in Fort Hills, majority owned by Suncor Energy Inc (SU.TO: Quote).
Net profit attributable to the company rose to C$94 million ($74 million), or 16 Canadian cents per share, for the first quarter ended March 31, compared with C$68 million, or 12 Canadian cents per share, a year earlier. Continued...