On Wednesday, August 4, Zug, Switzerland-headquartered mining group Xstrata plc released its preliminary results for the first half of the current year.
According to a statement released by Xstrata, in the first half of 2009, the company's operating profit excluding exceptional items and including its Prodeco Colombian thermal coal operations (Prodeco), declined by 63 percent year on year to 1.675 billion, while its first half net income fell by 77 percent to $643 million compared with the same period last year after metals prices slumped.
During the period in question, Xstrata's total revenue including Prodeco decreased by 39 percent year on year to $9.869 billion, while its operating profit before interest, taxes, depreciation and amortization (operating EBITDA), excluding exceptional items and including Prodeco, fell 51 percent to $2.815 billion compared to the year ago period, also reflected significantly lower metals prices, partially offset by higher received thermal and semi-soft coal prices.
Commenting on Xstrata's half-yearly results, the company's CEO Mick Davis said, "Xstrata's first half earnings reflect these adverse market conditions, with average LME base metal prices falling by up to 57 percent and EBITDA declining by 51 percent, despite a strong operating performance across the group. A solid production performance in the first half in thermal coal, mined nickel, zinc and copper largely mitigated the effects of lower volumes from the suspension or early closure of unprofitable, high-cost operations as well as reduced ferrochrome, ferronickel and coking coal production to align supply with demand."
"Real unit cost savings of $119 million or 1.1 percent of the operating cost base was achieved in the first half, including a very strong cost performance across each of Xstrata's base metals businesses. Further real unit cost savings are expected in the second half as the full benefits of restructuring, cost saving initiatives and productivity improvements are progressively realized," added Mr Davis.