Group
Xstrata achieved a robust financial and operating performance as a result of its decisive response to the downturn, which included restructuring businesses, curtailing capital expenditure and substantially reducing operating costs
Key points
- Cost cutting and operational restructuring generated real cost savings of $501 million
- Gearing reduced to 26% as a result of robust cash flows and a 2 for 1 rights issue which repaid $3.7 billion of debt
Group operating profit
$4,476m
2008: $7,249m
Alloys
Ferrochrome capacity utilisation rose from 20% at the start of the year to end of 2009 at 85%, production at energy-efficient furnaces was prioritised resulting in real cost savings of $13 million
Key points
- Operating profit was impacted by lower ferrochrome, PGM and vanadium prices and a stronger South African rand
- Cost savings and efficiency initiatives meant no permanent employees were retrenched, despite the reduced production capacity
Alloys operating profit
$(23)m
2008: $1,007m
Coal
Production improvements at a number of the Australian operations achieved real cost savings of $107 million
Key points
- Total thermal sales volumes increased by 9% due to the inclusion of Prodeco and higher volumes from Australia
Coal operating profit
$2,145m
2008: $3,546m
Copper
Xstrata Copper’s operating profit was impacted by lower copper prices and reduced volumes of gold and other by-product sales
Key points
- An ongoing focus on productivity and operational improvements delivered $55 million in real cost savings
- Record production volumes were achieved by Xstrata Copper’s Chilean operations and Mount Isa mines in Australia
Copper operating profit
$2,126m
2008: $2,297m
Nickel
Restructuring of its business has reduced average operating costs for Xstrata Nickel to the bottom half of the industry cost curve, while retaining its growth potential
Key points
- Xstrata Nickel’s restructuring initiatives achieved real cost savings of $134 million
- Consolidated cash costs fell by 33% to an average of $3.80 per pound and a run rate of below $3.00 per pound
Nickel operating profit
$(18)m
2008: $341m
Zinc
Operational restructuring, productivity improvements and implementation of sustainable cost savings positively impacted Xstrata Zinc’s operating profit
Key points
- Real cost savings of $192 million were achieved through production and operational improvements
- C1 cash costs were reduced by 25% to 43.5 cents per pound
Zinc operating profit
$506m
2008: $104m
