Teck Cominco continues profit streak with record Q2 earnings

Vancouver – A healthy base metals and coal market helped push Teck Cominco (TEK.B-T) to its third consecutive quarter of record earnings.

In its bottom line, the company delivered record 2004 second quarter earnings of $116 million, or 60 cents per share. In the comparative quarter from last year, restated earnings were $9 million or 4 cents per share.

Surging copper prices over the period assisted the company’s 97.5% owned Highland Valley Copper mine in being the single, largest contributor to earnings, with $79 million in operating profit. Molybdenum prices also added significantly to the bottom line with a realized price in Q2 of US$15 per pound, compared with US$5 a pound in corresponding quarter of 2003.

At the Elk Valley Coal Partnership, where Teck Cominco has increased its interest from 35% to 38%, buoyant coal prices coupled with increased production and sales resulted in the operation contributing $39 million toward operating profit.

The wholly-owned Trail smelting-refining complex, one of the largest lead-zinc smelters and refineries in the world, reported $47 million towards the profit line. Once again higher metal prices for zinc, lead and specialty by-products accounted for the increase, along with increased power revenues from electricity sales.

Cash flow from operations for the second quarter was at $246 million, up over 400% from the previous year’s corresponding quarter.

The diversified mining giant outlined a major increase in capital expenditures over the quarter, pegged at $50 million, largely consisting of development of the Pogo gold project in Alaska and the Pend Oreille zinc mine in Washington State.

Construction at Pogo resumed in early-May upon resolvement of an environmental group’s appeal of the issuance of an Environmental Protection Agency (EPA) National Pollutant Discharge Elimination System permit.