[miningmx.com] — XSTRATA came broadly in line with forecasts with a 30% jump in first-half core profit and more than doubled its dividend, pointing to a stronger second half as its copper unit helps the miner recover from a flood-hit start to 2011.
The fourth-largest UK-listed diversified miner said earnings before interest, tax, depreciation and amortisation (EBITDA) came in at $5.82bn, broadly in line with forecasts.
Its operating profit rose 31% to $4.25bn, while attributable profit came in at $2.9bn, up 25%. Earnings per share rose 24% to $0.98.
The group more than doubled its interim dividend, however, to $0.13 from $0.05 a year ago.
“In summary, we delivered robust earnings despite a number of one-off impacts to our operations in the early part of the year,” said CEO Mick Davis. “Our recovery has been swift and robust and we are now operating with good momentum to deliver a substantially stronger second half.”
Copper, the price of which climbed more than 30% in the first half, accounted for 50% of Xstrata’s operating profit in 2010.
Xstrata pointed to rising costs across the industry, as it is hit by a jump in diesel prices, increasing energy costs in South Africa and rising wages across producer nations. But the miner said it had achieved $52m of real unit cost savings.
Anglo American, the first of the UK-listed diversified miners to report last week, referred to a “dramatic” cost increase across the board and CEO Cynthia Carroll said she saw little hope of that changing.
Xstrata’s own consensus of 16 analysts’ forecasts had put expectations for first-half core profit at $5.84bn, with operating profit at $4.36bn. Earnings per share was seen at $0.99.
