Xstrata reinstates dividend, upbeat on outlook

"Robust economic growth and demand for commodities from industrialising nations is likely to continue," Chief Executive Mick Davis said in a statement. "The medium term outlook for commodity demand remains very promising."

GLENCORE TIE UP?

Attributable profit, excluding exceptional items and discontinued operations, fell to $2.77 billion (1.78 billion pounds) last year from $4.70 billion in 2008 mainly due to weaker metals prices on 16 percent lower revenue of $23.5 billion.

This compared to a consensus profit forecast of $2.76 billion, according to 11 analysts on Thomson Reuters I/B/E/S.

Glencore, which owns 35 percent of Xstrata, said in December when it raised $2.2 billion there was potential for a listing and possible combination with another group.

Davis told Reuters he did not know what group Glencore was referring to since there has been no discussions about a possible merger. "Clearly, when one puts together a great trading house and a great mining house, you have the potential for value creation," he said in an interview.

"But there is a wealth of other issues that one would have to think about in looking at that sort of combination. But to start speculating about these type of things when there is nothing on the table doesn't make much sense."

Anglo-Swiss Xstrata has not decided whether to buy the rest of platinum producer Lonmin or sell its 25 percent stake, Davis added.

Xstrata said it delivered real cost savings of $501 million, representing a 5 percent fall in the operating cost base.

Xstrata, which last October dropped a merger plan with Anglo American, has said it was shifting its focus to organic growth from major takeovers.