TORONTO (miningweekly.com) – Canadian diversified miner Teck Resources on Thursday declared a smaller fourth-quarter profit, as lower prices for the commodities that it produces foiled earnings growth.

For the three months ended December 31, profit attributable to shareholders was C$232-million, or C$0.40 a share, compared with C$200-million, or C$0.34 a share, in the same period of 2012.

Adjusted profit, which excludes the effect of certain transactions, totalled C$227-million, or C$0.40 a share, compared with C$409-million, or C$0.70 a share, in the same period a year earlier.

Teck said the decline in its adjusted profit was mainly owing to lower prices for its products, a decline in zinc and copper sales volumes as a result of the timing of shipments and higher unit costs at its coal operations.

The Vancouver-based firm’s adjusted profit came in below analysts’ average expectation of C$0.43 a share on revenue of C$2.3-billion.

Revenues from operations were down 11% to C$2.38-billion in the fourth quarter, compared with $2.7-billion a year earlier.

Teck’s three key commodities are coking coal, copper and zinc, and prices for all three were down year-over-year as a result of uncertain global demand. While Teck’s realised zinc price was only 2% lower than the fourth quarter of 2012, coal was down 11% and copper was down 10%.

The selling price for coal declined 11% to $142/t, while that of copper fell 10% to $3.24/lb during the fourth quarter. The price of zinc was down 2% to $0.86/lb, while silver dwindled 36% to $21/oz. Lead fell 4% to $0.96/lb.

Revenues from Teck’s copper business unit decreased by C$133-million year-over-year as a result of softer copper prices, reduced by-product revenues and lower sales volumes owing to timing of shipments.

The effect of the stronger US dollar in the fourth quarter partly offset the declines in commodity prices.

Teck said it had achieved a number of significant operating and sales records in the fourth quarter and full year, including record coal sales of 26.9-million tonnes as a result of increased global steel production; new quarterly record copper output at 105 000 t in the fourth quarter; and record throughput at its Greenhills, Antamina, Carmen de Andacollo and Red Dog mines.

"We were pleased with our operating performance in 2013. We achieved record annual steelmaking coal sales, had record throughput at three of our mines, implemented approximately C$360-million in savings from our cost reduction programme and, with our partners, announced that we are proceeding with the construction of the Fort Hills oil sands project.

“However, prices for all of our key products were down compared to last year, resulting in lower profits and cash flows than in 2012,” president and CEO Don Lindsay said.

Copper production in the fourth quarter totalled 105 000 t, which was a new quarterly production record, compared with 103 000 t a year earlier and an increase of 15% from the third quarter. The higher production is a result of record mine and mill throughput at Antamina and improved output from Quebrada Blanca.

Metallurgical coal output in the fourth quarter was 6.7-million tonnes, 5% higher than in the same period in 2012.

As on Wednesday, the company had C$2.5-billion cash in the bank.

Last October, Teck and its joint venture partners Suncor Energy and Total E&P Canada announced that they were proceeding with construction of the Fort Hills oil sands project, in northern Alberta. The mine has an expected life of more than 50 years.

The project is expected to produce first oil as early as the fourth quarter of 2017 and achieve full production capacity of 180 000 bl/d of bitumen within 12 months. Teck’s share of production would be 36 000 bbl/d, or 13-million barrels a year of bitumen at full production.

Lindsay said that Teck was starting to see improvements in global economic conditions and believed that over the longer term the industrialisation of emerging market economies would continue to be a significant positive factor in the future demand for commodities.

However, Teck said that it continued to experience volatile markets for its products, and prices for some of its products have declined significantly.

Despite demand for its coal remaining strong, Teck said that new sources of supply had put downward pressure on coal prices, adding that the recent weakness in some of these markets may well persist for some time.

The company noted, however, that the Canadian dollar had fallen significantly against the US dollar to date in 2014 and this has had a positive effect on the profitability of its Canadian operations. It would, to a lesser extent, put upward pressure on a portion of the company’s operating costs and capital spending.

The company expected 2014 copper output of between 320 000 t to 340 000 t, compared with 364 000 t in 2013.

Coal output was forecast at 26-million to 27-million tonnes, but actual output would depend on customer demand for deliveries of steelmaking coal.

Zinc-in-concentrate output was expected to range between 555 000 t to 585 000 t, compared with 623 000 t in 2013.

On Thursday afternoon, Teck’s TSX-listed stock traded down 6.17% at C$26.14 apiece.