Going by its latest quarterlies, Teck Resources (TCK.B-T, TCK-N) looks to have definitively turned the corner away from its severe debt problems that started more than a year ago.
In its latest third quarter, Teck tallied net earnings of $609 million on record revenue of $2.1 billion, compared with net earnings of $424 million on revenues of $1.7 billion during the year-ago period. The company’s best performing assets in the latest quarter were in its core copper, coal and zinc businesses.
Of note, the company is now sitting on $1.5 billion in cash, and the US$9.8 billion in debt Teck took on in mid-2008 to buy Fording Coal’s assets has whittled down to US$2.7 billion after a series of asset sales and a US$1.5-billion investment from China Investment Corp., the US$200-billion sovereign wealth fund.
Teck says its net debt to net-debt-plus-equity ratio stood at 34% at the end of the third quarter, compared to 52% at the end of 2008, when the company was under financial distress.
Investors clearly liked what they saw, and drove shares up $1.79, or 5.8%, to close at $32.51 today.
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