Teck Resources Limited's CEO Discusses Q1 2012 Results - Earnings Call Transcript

Before we start, I'd like to draw your attention to the forward-looking information slides on Pages 2 and 3 of our presentation package. This presentation does contain forward-looking information regarding our business. Various risks and uncertainties may cause actual results to vary. Teck does not assume the obligation to update any forward-looking statement.

And at this point, I'd like to turn the call over to Don Lindsay.

Donald R. Lindsay

Thank you, Greg, and good morning, everyone. Thank you for joining us.

I will start this morning with a review of the results for the quarter, and then I'll turn the presentation over to Ron Millos, our CFO, to address some more in-depth financial topics. A number of other members of the management team are on the call this morning and available to answer your questions.

Starting on Slide 5. This is our best first quarter ever with record revenues and gross profit. Our coal production was good, considering the fact that it was the first quarter. And normally, we get difficult conditions in the first quarter, although this one was better than most. We produced 6.3 million tonnes for an annualized rate for over 25 million tonnes. We ended the quarter with a cash balance of about $3.8 billion, and after using some of our cash for dividends and debt refinancing transactions in the quarter, that was a good number. Subsequent to quarter end, we completed the acquisition of SilverBirch Energy to give us 100% control over the Frontier oil sands project.

And finally, during the quarter, we completed the highly anticipated QB2 feasibility study, which we will talk more about later on the call.

Turning to Slide 6. Our record first quarter revenues were over $2.5 billion, up over 8% from Q1 2011. And it was a record first quarter gross profit before depreciation and amortization of over $1.1 billion. Q1 profit of $218 million was impacted by a financing charge of $329 million associated with the debt refinancing transaction, so it is more appropriate to look at adjusted profit. First quarter adjusted profit was $504 million, which was up 12% from last year's first quarter, while over the same period EBITDA was $781 million.

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