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Xstrata profits take a deep drop

Posted 3 hours ago

Xstrata Plc has reported a huge drop in its quarterly profits. The company reported Tuesday that it’s “attributable profit” for the six-month period that ended June 30, was 77 per cent lower than the same period one year ago.

Xstrata Plc is the parent company for the Xstrata Copper Kidd Mine and Xstrata Copper Kidd metallurgical site and smelter in Timmins. The company also owns the Montcalm nickel mine, which has been closed because of a blasting accident last spring.

Xstrata reports net income has dropped to $643 million from the $2.77 billion reported as net income at this time last year. In a general statement, Xstrata says the slump in metal prices is the reason for the downturn.

The company reports that overall sales revenues are down by 39 percent. Sales dropped to $9.8 billion at the end of six months compared with sales of $16 billion the previous year.

Analysts are watching Xstrata's numbers and performance closely as the company is proposing a merger with Anglo American Plc, another major multi-national mining corporation. The merger would combine Xstrata and Anglo mining operations in Canada, Australia and South Africa in a manner to designed to make both companies more competitive in the world marketplace.

Xstrata also reports that one of the highlights of the six-month financial report was the continued strong operating performance of copper, zinc and nickel. This was outlined last month when the company released a statement mentioning that the Xstrata Kidd mine was listed as having a “solid operational performance” that helped to offset reduced production at other Xstrata operations. The report noted that higher grades of copper at the Kidd Mine more than offset significant production declines in other parts of the world where the company had production problems.