February 12, 2008 / 12:40 AM / 10 years ago

Teck Cominco profit hit by charges, lower prices

TORONTO (Reuters) - Teck Cominco TCKb.TO said on Monday its fourth-quarter profit fell 68 percent, hit by lower zinc and coal prices, the stronger Canadian dollar and C$84 million in one-time charges.

Teck, a diversified Canadian miner with heavy exposure to copper and zinc, earned C$280 million, or 64 Canadian cents a share, down from C$866 million, or C$2.01 a share, in the year-before period.

The Vancouver-based company took C$51 million in writedowns related to an investment in Tahera Diamond TAH.TO and two of Teck’s zinc mines. It also took a C$33 million equity loss from its decision to halt development of the Galore Creek gold and copper project, a joint venture with NovaGold (NG.TO).

Adjusted net earnings per share were 86 Canadian cents. Analysts polled by Reuters had expected, on average, a profit of 89 Canadian cents a share, before exceptional items.

Revenue for the quarter fell to C$1.5 billion from C$2.1 billion.

Zinc production was 165,000 tonnes in the quarter, up from 148,000 tonnes a year earlier, while copper output rose to 84,000 tonnes from 70,000 tonnes. Gold production was 85,000 ounces, lead output was 39,000 tonnes, and coal production was 2.2 million tonnes.

Prices for zinc and coal were down 46 percent and 26 percent, respectively, in Canadian dollar terms.

Cash flow from operations was C$560 million, down from C$1.2 billion a year earlier.

Tahera filed for creditor protection in January due to problems at its Jericho diamond mine in Canada’s far north.

Teck also said that, following the announcement last week of soaring costs at the Petaquilla copper project in Panama, “there can be no assurance that we will participate in the development of the project.”

Teck can earn a 26 percent interest in the project if it commits to funding 52 percent of its development costs.

($1=$1.00 Canadian)

Reporting by Cameron French; Editing by Rob Wilson

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