Xstrata earnings hit by low metals pricing

Mar 05, 2013 | 03:42 PM | Shivani Singh

Tags  Xstrata, Glencore, Michael Davis, Mick Davis, earnings results, Shivani Singh

SINGAPORE — Xstrata Plc’s core earnings fell 30.4 percent year on year in 2012 due to lower commodity prices and stronger currencies.

"Our businesses faced difficult operating conditions during the year, as the combined impact of falling commodity prices, ongoing inflationary pressure on operating costs and continued strong producer currencies relative to the U.S. dollar put pressure on our margins," chief executive officer Michael "Mick" Davis said.

Earnings before interest, taxes, depreciation and amortization (Ebitda) fell to $8.1 billion from $11.7 billion in 2011 on revenue that dropped 6.7 percent to $31.6 billion. This excluded exceptional items of $2.6 billion for a write-down on Xstrata’s investment in London-based Lonmin Plc ($840 million), as well as the Brunswick zinc mine in Canada and the Cosmos nickel mine in Australia as they reached the end of their operational lives. Additional write-downs in response to adverse market conditions in South Africa totaled....

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