(Reuters) - Canadian miner Teck Resources TCK.N TCKb.TO reported a sharp increase in its fourth-quarter profit on Thursday, on the back of higher coal prices.
Net income rose to C$637 million, or C$1.08 a share, from C$325 million, or 55 Canadian cents a share, a year earlier, when a one-time financing item weighed down results.
Excluding one-time items, earnings increased to C$1.04 a share from 87 Canadian cents.
Vancouver, British Columbia-based Teck is one of the world’s top exporters of metallurgical coal, which is used to produce steel. The company, which owns mines spread across Canada, the United States, Chile and Peru, is also a large producer of copper and zinc.
Quarterly revenue rose 9.4 percent to C$2.97 billion, as a 27 percent increase in coal prices helped offset declines in the prices of copper, zinc and lead.
Gross profit from Teck’s coal business rose 42 percent to C$781 million, even though prices have pulled back from record levels hit earlier in 2011. The company said it had realized an average coal price of US$253 per tonne in the fourth quarter.
Teck said it had already reached agreements with its customers to sell 5.3 million tonnes of coal in the first quarter at an average price of US$230 per tonne. The company expects to conclude additional sales over the course of the quarter.
Teck said it was still experiencing volatile markets for its products, as the uncertainty over economic conditions in Europe continues to have an effect on the global economy.
The company noted that while both copper and zinc prices are roughly the same as the averages for 2011, coal market conditions weakened in the third quarter and remained so through the fourth quarter.
Given operational improvements, Teck forecast its 2012 copper output rising to between 350,000 tonnes and 375,000 tonnes. This compares with 322,000 tonnes produced in 2011.
It expects zinc in concentrate production in 2012 to be in the range of 580,000 to 610,000 tonnes, compared with 646,000 tonnes in 2011. The decline is primarily due to lower expected output from its huge Red Dog mine in Alaska.
Teck forecast 2012 coal production of between 24.5 million and 25.5 million tonnes, up from about 22.8 million tonnes in 2011.
“Our actual production will depend upon improvements in customer demand for deliveries of steelmaking coal,” the company said. “Should deliveries not improve, we may adjust our production plans, depending on market conditions.”
Reporting By Euan Rocha; Editing by Erica Billingham and Lisa Von Ahn