Key Financial Results $m
Six months to 30.06.10 Six months to 30.06.09 % Change
Revenue 13,608 9,541 43
Operating EBITDA* 4,494 2,685 67
Operating profit* 3,236 1,605 102
Attributable profit* 2,299 909 153
Attributable profit 2,288 690 232
Earnings per share (basic)* $0.79 $0.38 108
Earnings per share (basic) $0.79 $0.29 172
Net debt to net debt plus equity 19% 28% (32)
Net assets 35,223 33,302 6
Net assets per share** $12.13 $11.49 6
Dividends declared and paid (2009 final) 8.0¢ - -
Dividends proposed 5.0¢ - -
* Excludes exceptional items
** Excluding own shares
Highlights
. Strong financial performance more than doubled operating profit to $3.2 billion and attributable profit rose by 153% to $2.3 billion
. Further real cost savings of $243 million achieved during the period together with increased volumes of ferrochrome, PGMs, coking and semi-soft coal, refined nickel and mined zinc
. Net debt reduced to $8.4bn and gearing to 19%* at the end of June
On track to deliver 50% increase in volumes and 20% cost reduction from Xstrata’s industry-leading organic growth pipeline by 2014:
Successfully commissioned major Nickel Rim South, Blakefield South coal and Goedgevonden coal growth projects in the first half
Approval of major $4.2bn Las Bambas copper project in southern Peru and $1.1bn Ulan West coal project in Australia – a total of over $8bn of new projects approved in first half
15 major growth projects now approved and in implementation, representing $14 billion of capital investment
Interim dividend of 5¢ per share, representing 25% increase over implied 2009 full year dividend reflecting the Board’s confidence in Xstrata’s prospects.
Mick Davis, Xstrata plc Chief Executive Officer commented:
“Xstrata’s first half performance was characterised by another robust cost performance, volume growth in most key commodities and positive momentum in developing our industry-leading pipeline of organic growth projects.
“In total, 15 major growth projects are now approved and in the construction phase, representing a total of $14 billion of capital investment. These projects alone will deliver substantially all of our expected 50% increase in overall volumes by 2014. All of our projects remain on track and within budget and I am very pleased with the progress our teams are making from a technical, social and environmental point of view.
“The compelling nature of the opportunity is clear. Our projects will deliver attractive returns and overall volume growth of 50%, weighted towards copper, thermal coal and nickel. Our operating cost profile will reduce by around 20% as new lower cost production is brought on stream. The next transformation of Xstrata is well under way from our suite of approved and soon to be approved organic growth projects.
“We remain very confident in the buoyant outlook for Xstrata’s commodities in the medium term. The short term outlook for macro-economic conditions remains mixed, with a ‘three-speed’ global economy likely to persist for the foreseeable future. With the exception of Germany, the EU is likely to struggle for some time to reach historical growth rates. The US is likely to continue to provide an important base of demand for exports from developing countries and directly for commodities as its economic recovery continues. However the developing economies, led by China, Brazil and India, are set to continue to provide the main driver of demand growth for our products.
“I remain very confident that Xstrata’s industry-leading growth prospects, attractive commodity mix and proven ability to realise value from the optimisation of our existing portfolio position the Group to deliver superior returns to its shareholders.”
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