Xstrata profits down 35 percent

Zug-based mining group Xstrata has announced a fall in profits of over a third year-on-year and is thus planning to raise further capital via a rights issue.

 

Attributable profit fell from 5,543 billion US dollars in 2007 to 3,595 billion in 2008 - a 35% drop – with EBITDA down 11% and dividends per share down 13 percent. Revenue was virtually unchanged at 27,952 billion.

 

CEO Mick Davis pointed to the global financial crisis combined with the slump in raw material prices.

 

Xstrata also announced a 4.1 billion pound sterling (approximately 5.9 billion US dollar) rights issue to repay existing debt, with the company's major shareholder Glencore, who currently own 34.5%, prepared to take up its rights in full. Xstrata will also be acquiring the Prodeco thermal coal assets in Columbia from Glencore for a cash consideration of 2 billion US dollars.