Xstrata earnings down 77%, repeats Anglo proposal

Miner Xstrata posted a 77% drop in adjusted earnings per share on Tuesday and repeated its arguments for a “merger of equals” with rival Anglo American.

Xstrata made public its “nil premium” merger proposal on June 21 and Anglo rejected it the following day as “totally unacceptable”.

“I continue to believe that it is in the best interests of Xstrata and Anglo American shareholders to examine the potential to create the value we have identified,” chief executive Mick Davis said, but did not unveil any new initiatives regarding the proposal.

Xstrata, the world’s fifth-biggest diversified mining group by market value, said EPS for the six months to the end of June fell to 38 cents from $1,66, adjusted for the firm’s $5,9-billion rights issue and including its recent takeover of the Prodeco coal operation.

This was higher than a consensus forecast of 33,6 cents, based on the average estimate of nine analysts polled by Reuters.

Attributable profit fell 68% to $909-million and operating earnings before interest, tax, depreciation and amortisation (EBITDA) declined 51% to $2,82-billion. - Reuters


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