Leadership

Xstrata resumes paying dividends, despite profit fall

08.02.2010
Global mining giant Xstrata has announced it is begin paying dividends to its shareholders again, despite announcing a fall in its full-year profits.

Xstrata reported a drop in its 2009 pre-tax profits to US$1.87bn from the US$6.05bn reported in 2008, which it put down largely to the fact that average commodity prices in 2009 were significantly lower than in 2008.

However, the mining company said it would pay out a final dividend of 8 cents per share in May 2010, a move it said reflected its board’s confidence in the firm’s “near and medium-term prospects and financial position”.

Xtrata CEO Mick Davis also said he believed the medium-term outlook for commodity demand “remains very promising, driven by the ongoing urbanisation and industrialisation of high-growth, populous economies, with China and other industrialising countries taking active steps to rebalance their economies towards domestic consumption-led growth over the next decade”.

“There are a number of risks that must be carefully managed on the path to a sustainable OECD recovery. However, many of the short- and medium-term leading indicators we monitor are showing signs of recovery, notwithstanding the fact that credit expansion in OECD economies remains sluggish.

“In time, the return to a more normalised level of growth of OECD economies will add further impetus to the growth of the global economy and commodity demand,” Davis said, adding that he believed the company’s prospects “remain very encouraging”.

^{Photo reproduced by permission of Xstrata}