Xstra points?

7 August 2012 By Kevin Allison

The miner’s first-half results were worse than last year, but better than expected thanks to cost cutting. The resilience may harden Xstrata shareholders’ expectations of improved merger terms from Glencore. But it is still far from a done deal.

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Xstrata, the Anglo-Swiss miner, reported a smaller-than-expected drop in first-half profit on Aug. 7.
The company, one of the world’s biggest producers of copper and coal, said earnings before interest, tax, depreciation and amortisation fell to just over $4 billion in the six months to June 30, excluding special items. That was down 31 percent from the year-ago period, but ahead of analysts’ consensus estimate of $3.87 billion.
Operating profit excluding exceptional items fell 42 percent to $2.45 billion, reflecting a downturn in commodity prices, particularly of nickel and zinc. Annual contracts sheltered the miner from a sharp fall in thermal coal prices during the period. Xstrata said its businesses cut out $105 million of costs in the period, adjusting for exchange rates and inflation.

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