Glencore Xstrata PLC Profit Rises 20% On Improved Copper Production

opencast.miningThe share price of Glencore Xstrata (LSE: GLEN) improved 3% to 336p during early trade this morning after the group unveiled profit growth of 20%. Meanwhile, the firm posted a net loss of $7.4bn after a goodwill write-down against the merger with Xstrata in May.

Yesterday, while the FTSE 100 dropped more than 100 points, the Switzerland-based miner was one of the few shares investors were buying, as the Ukraine crisis boosted commodities prices.

Adjusted net income increased to $3.7bn from $3bn the year before, and revenue jumped 9% to  a heady $233bn.  

The blue-chip company reported strong production figures, with copper increasing 26% to 1.5m tonnes, while costs fell.

Glencore added that its sale of its $5.9bn Las Bambas copper mine, in Peru, remains ongoing.

The chief executive, Ivan Glasenberg, commented:

“Our marketing division once again delivered a strong overall performance, while the modest year on year decline in our industrial asset performance inevitably reflected the weaker commodity price environment in 2013.”

“Glencore remains the only genuinely diversified natural resources company in respect of business activity, commodity and geography. Our financial performance in 2013 reflects this, with a consistent pro forma EBITDA and operational cash flow performance compared to 2012.”

“As we look ahead to 2014, we continue to see healthy demand growth in all our key commodities, underpinned by the long term trend of urbanisation in emerging markets and parts of the developed world returning to trend growth.”

The firm reported earnings per share of 20p in coverage of a dividend per share of 10p.

Therefore, taking into account the earlier price adjustment, shares in Glencore Xstrata may trade on a P/E of 17 and offer a dividend yield of 3%.

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> Mark does not own shares in Glencore Xstrata.