Xstrata reports fall in full-year profits

Anglo-Swiss mining group, Xstrata, has today reported a fall in full-year pre-tax profits to $1.87 billion (£1.2 billion), against $6.05 billion a year earlier.

However, despite the fall, the company said it will resume dividend payments after scrapping them for the first half of 2009, as a result of growing debt and a slump in demand for metals.

It embarked on a £4.1 billion rights issue last year in order to help slash debt by $3.7 billion.

A final dividend of 8 cents per share will be paid in May.

Commenting on the results, Mick Davis, chief executive, said: “Robust economic growth and demand for commodities from industrialising nations is likely to continue, with many forecasters anticipating Chinese GDP growth of around 9% in 2010.”

He continued: “The board’s increased confidence in the medium-term outlook for commodities and Xstrata’s encouraging prospects and financial position have enabled the resumption of dividend payments.”

Last October, the company scrapped plans to make a takeover offer for rival Anglo American, after having approached the company in June with a view to a merger.

In related news today, a report by Capita Registrars Research found that UK companies paid out £57 billion in dividends to investors last year - 15% less than in the previous year.

Furthermore, the research found that investors are unlikely to fare any better this year because of a weak economic recovery.

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