INTERNATIONAL resources group Xstrata, which is merging with commodities trading group Glencore International, suffered a 37% decline in attributable profit (excluding exceptional items) from $5.785bn to $3.652bn for the 12 months ended December 31.
This translated to basic earnings per share of $1.24 versus $1.97.
Mick Davis, CEO of Xstrata, said: "(Last year) was a transformational year for Xstrata across a number of fronts. The development of our project pipeline reached its zenith in 2012, with 10 major projects entering commissioning.
"The introduction of a number of new world-class operations into Xstrata’s portfolio delivers not only significant volume increases and further improves the relative competitive position of Xstrata’s portfolio … but lays the foundation for further attractive brownfield growth for many years to come."
He said the company’s focus on reducing costs had led to a reduction in costs in real terms for the 11th consecutive year.
The $176m of cost savings achieved last year were predominantly realised through a combination of cost-efficiency initiatives and the benefit of increased volumes in its coal and zinc businesses.
"During our current phase of expansionary capital expenditure … we have maintained gearing below 30%. Despite a peak capital expenditure of $10.3bn in 2012, our balance sheet remains robust, with net debt at year end at $14.7bn and gearing at 24%.
"In November, our shareholders approved our merger with Glencore International plc, heralding the next significant development in Xstrata’s history, and the creation of a unique natural resource company with an improved ability to capture returns along the value chain and redefine the competitive landscape.
"My executive team and I are content that we will hand over to the new Glencore Xstrata a company with a strong legacy for value creation and growth, a high-quality portfolio of operations and growth options, supported by a very healthy balance sheet," he said.
It was announced on Tuesday that the longstop date for the merger between Glencore and Xstrata had been extended to April 16, as not all of the regulatory approvals had been received. China had yet to give its blessing for the deal, which South Africa’s competition authorities had already given the green light to.