Miner Xstrata reported a better-than-expected 86 percent jump in annual profit on stronger commodity prices and gave a positive outlook for 2011.
The Anglo-Swiss miner said it was still assessing the impact on this year’s results from the recent flooding and cyclones in Queensland – where it has coal, copper and zinc operations – after it was forced to close some mines in the Australian state.
“As we stand at the moment we don’t see any significant impact on 2011 results,” Chief Executive Mick Davis told reporters.
Xstrata, the fifth-biggest diversified miner by market capitalisation, said the full impact would partly depend on the speed of recovery in infrastructure and on future rainfall, but noted that current spot prices had risen in response to the supply constraints.
Attributable profit, excluding exceptional items, for 2010 surged to $5.15bn from $2.77bn last year, beating the $5.05bn consensus of 18 analysts provided by the company.
The company reduced its gearing to 15 percent from 26 percent and its net debt by 38 percent to $7.6bn.
“Overall a solid set of numbers with growth supported by a strong balance sheet,” said Credit Suisse in a note.
The miner, one of the most heavily traded companies in London, said it planned to pay a final dividend of 20 cents a share, reflecting a return to pre-crisis levels and plans to continue a progressive dividend policy.
Xstrata, the world’s biggest producer of thermal coal, reported lower 2010 production for coal and a mixed performance for copper in the first week of this month, although prices rose for most of its commodities. Copper and coal are the group’s biggest earnings contributors.