Xstrata posts 13% rise in annual net profit

Xstrata, the world’s fifth-biggest mining group by market capitalisation, posted a 13% rise in annual net profit on strong output, however, this was slightly below market forecasts.

The group said net profit for 2007 rose to $5.54 billion compared with $4.89 billion in 2006.

Revenue increased 12% to $28.54 billion while earnings per share before discontinued operations and exceptional items also increased 12% to $5.60.

Xstrata, headquartered in Zug, Switzerland and listed on the London Stock Exchange, said it produced record amounts of coking and thermal coal, ferrochrome, nickel, zinc and platinum last year.

The mining group is in talks about a possible takeover by Brazil’s Vale. Vale said it had reached its limits in takeover talks and added any future deal depended on Xstrata’s main shareholder Glencore and its stance over marketing rights.

The takeover could be one of the world’s biggest in a deal that could be worth $90 billion. In a statement, Xstrata said discussions with Vale are ongoing and may or may not lead to an offer for Xstrata.

The company added it is still on the lookout for ways to improve value for shareholders, we continue to assess a range of opportunities to continue Xstrata’s success to date in delivering superior value to shareholders.

Chief Executive, Mick Davis, said I remain very confident in the outlook for all of Xstrata’s commodities through the medium and long term.

Xstrata is the world’s largest zinc producer and is also a major producer of copper, coking coal, thermal coal, nickel, ferrochrome and vanadium. The group has a smaller involvement in gold, lead and silver.

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