By Firat Kayakiran
Feb. 8 (Bloomberg) -- Xstrata Plc, the world’s largest exporter of coal used for power, said full-year profit declined 41 percent after prices of the fuel declined.
Net income fell to $2.77 billion, from $4.7 billion a year earlier, the Zug, Switzerland-based company said today in a statement. Operating earnings before interest, tax, depreciation and amortization, or Ebitda, fell 27 percent to $7.05 billion, beating the $6.67 billion median of 19 analyst estimates compiled by Bloomberg.
The average thermal coal price at Australia’s Newcastle port, a benchmark for Asia, was $72 in 2009, down from $129 a year earlier, according to a McCloskey Group Ltd. index. Xstrata said Feb. 1 that output of the fuel rose to a record in 2009 after buying Colombian mines in March from Glencore International AG, the mining company’s biggest shareholder.
“The medium term outlook for commodity demand remains very promising,” Xstrata’s Chief Executive Officer Mick Davis said in the statement. Demand will stem from China and other industrializing countries taking steps to rebalance their economies towards domestic consumption-led growth over the next decade, he said.
Coal was the largest contributor to Xstrata’s operating earnings last year, followed by copper. Coal output rose 11 percent to 95.2 million metric tons, with the Colombian Prodeco mines contributing 10.5 million tons. Glencore has the option to buy back the assets from Xstrata.
Copper Output
The company last week said mined copper output declined 5 percent to 906,898 tons on lower shipments from the Mt. Henry, Alumbrera and Antamina mines. Nickel gained 5 percent to 57,052 tons and zinc in concentrate rose 20 percent to 1.03 million tons. Chrome fell 30 percent to 786,000 tons.
The average price of copper for immediate delivery on the London Metal Exchange last year dropped to $5,178 a ton from $6,959 a year earlier. Average nickel prices fell 30 percent to 14,711 a ton. Zinc declined 11 percent to $1,682 a ton.
Xstrata plans to expand output 50 percent by 2013, mainly at its copper and coal units, Davis said in London on Dec. 8. The company said Dec. 3 it would increase capital spending 89 percent to $6.8 billion in 2010 as commodity demand revives.
--Editors: Tony Barrett, Simon Casey
To contact the reporter on this story: Firat Kayakiran in London at +44-20-7330-7484 or fkayakiran@bloomberg.net
To contact the editor responsible for this story: Simon Casey at +44-20-7673-2631 or scasey4@bloomberg.net
-0- Feb/08/2010 06:30 GMT
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source: http://www.businessweek.com
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