Xstrata profit up sevenfold on commodities boom

[miningmx.com] — Anglo-Swiss mining group Xstrata on Tuesday reported a sevenfold increase in annual net profit in 2010 as it rode the forecast boom in commodities markets and prices.

Net profit reached $4.69bn last year after a drop in 2009, preliminary results showed.

Chief executive Mick Davis said the year was marked by a “strong operational performance” and highlighted the value of restructuring carried out in 2009 before an economic recovery took hold and commodity prices started rising again.

Xstrata’s attributable profit, without exceptional items, grew by 86% to $5.1bn in 2010, while operating profit rose by three quarters to $7.6bn.

Revenues increased by 34% year-on-year to $30.5bn.

“Our growth plans will see us progressively deliver substantial additional volumes of key commodities into fundamentally constrained commodity markets,” Davis said, as the group set its sights on a broader-based recovery beyond China and emerging economies.

Nearly a year ago, Xstrata’s chief executive had predicted that commodities markets would shrug off depressed demand and prices and return to a situation where demand would outstrip supply.