TORONTO (miningweekly.com) – Canadian diversified miner Teck Resources has reported a significantly narrower fourth-quarter adjusted profit as lower copper and steelmaking coal prices have dented the company’s financial performance.

For the three months ended December 31, Teck reported net profit, excluding special items of C$116-million, or C$0.20 a share, compared with C$227-million, or C$0.40 a share, in the comparable quarter of 2013. The decline in profit was mainly owing to significantly lower coal prices and a decline in copper sales volumes and prices.

Analysts had expected adjusted earnings to average C$0.22 a share.

Revenues fell 5% to C$2.26-billion, beating the average analyst estimate of C$2.23-billion.

Net profit attributable to shareholders was C$129-million, or C$0.23 a share, compared with C$232-million, or C$0.40 a share, in the same period last year. Included in profit attributable to shareholders was C$27-million of positive noncash tax benefits related to tax reforms in Peru and Chile.

Teck had a geographically diversified portfolio of assets in copper, metallurgical coal, zinc and energy.

The company explained that, in US dollar terms, coal and copper prices in 2014 were down 23% and 6%, respectively, compared with 2013, and 23% and 7% on a quarterly basis compared with last year.

Sales volumes of coal and copper in 2014 were also lower than 2013, which, combined with lower prices, reduced gross profit for both of these business units. Gross profit from the company's zinc business unit increased by about 50% compared with 2013, mainly owing to a 13% increase in the zinc price and record output from the Red Dog mine, owing to increased mill throughput from softer ore.

Teck had reached agreements with customers to sell 6.2-million tonnes of coal in the first quarter, based on $117/t for the highest-quality product, and expected total sales in the first quarter, including spot sales, to be at or above 6.5-million tonnes.

The recent drop in oil prices and the strengthening of the US dollar were expected to have a significant positive effect on Teck’s operating costs over the near term if they persisted. The company pointed out that, with each C$0.01 change in the exchange rate, its earnings before interest, taxes, depreciation and amortisation were affected by about C$52-million, which was lower than its previous estimates owing to the effect of lower commodity prices.

Also, its mining operations, which used significant volumes of diesel fuel, benefited from the lower oil prices. Teck advised that each $1 change in the price of a barrel of oil had an effect of about C$5-million on its operating costs at current exchange rates.

The company's cost reduction programme continued to exceed its goals, having achieved about C$640-million of annualised reductions. This contributed to reduced unit costs at 10 of its 13 operations and helped all its operations to generate positive cash flows for the year.

Teck closed the year with a cash balance of $2-billion and in January paid a C$0.45-a-share dividend of C$259-million. On an annualised basis the dividend was C$0.90 a share.

The company reaffirmed support for its foray into the oil sands sector, saying it would invest C$2.9-billion for a 20% stake in the C$13.5-billion Fort Hills oil sands project controlled by its partner Suncor.

For 2015, Teck expected to produce between 26.5-million tonnes and 27.5-million tonnes of coal, depending on customer demand, between 340 000 t and 360 000 t of copper and between 635 000 t and 665 000 t of zinc.

Despite Teck’s TSX-listed stock on Thursday rising 6.36% to C$18.73 apiece, the stock had lost about 37% in value in the past 12 months.