FTSE 100 news summary: Xstrata, ENRC, Antofagasta, Tullow Oil, Smith & Nephew, Unilever

It has been a busy week for mining companies. Several majors released their production reports this week, while Xstrata (LON:XTA) confirmed it is in talks with Glencore (LON:GLEN) over a merger of equals.

Anglo-Swiss mining giant Xstrata (LON:XTA) confirmed that it is currently in discussions with its major shareholder Glencore over an all-share “merger of equals”.

The deal would value the combined business at around US$82 billion.

The statement from Xstrata was issued in response to press speculation that the two companies are in advanced merger talks and could officially announce the deal early next week.

Xstrata confirmed that it has received an approach from Glencore, which “may not lead to an offer being made by Glencore for Xstrata”, adding there can be no certainty that any offer will be made.

The Switzerland-based commodities trader holds a 34 percent stake in fellow FTSE 100 constituent Xstrata, which currently has a market cap of £36.3 billion.

Peers Eurasian Natural Resources (LON:ENRC), Antofagasta (LON:ANTO) and Vedanta Resources (LON:VED) released their production reports this week.

ENRC said volumes for most ferroalloys production dropped in the last three months of 2011 compared to the last quarter of 2010 with the exception of a five percent increase for low-carbon ferrochrome and ferrosilicochrome.

Total saleable ferroalloys production for the year fell 2.9 percent against 2010.

Iron ore production also was in decline during the quarter with iron ore extraction and primary concentrate production falling 3.3 percent and 3.8 percent respectively.

Total saleable product for the year was down five percent from 2010.

Meanwhile, Antofagasta reported a 13.3 percent jump in group copper production to 187,000 tonnes during the last quarter of 2011, which was mainly due to increased production at Esperanza and Los Pelambres.

Copper production in the full year 2011 was 640,500 tonnes, up 22.9 percent from the 521,100 tonnes produced in 2010.

Moving to Vedanta said its silver production in the third quarter rose 37 percent to 1.85 million ounces and leadproduction more than doubled, rising 107 percent to 29,000 tonnes.

During the quarter, iron ore output reached 5.04 million tonnes, up from 4.78 million tonnes in the corresponding prior quarter.

Away from mining companies, telecom major BT (LON:BT.A) said its adjusted pre-tax profits jumped 48 percent to 18 percent to £628 million during the last three months of 2011 despite a five percent drop in revenues to £6.77 billion.

BT also told investors it expected to achieve its 2013 EBITDA target of over £6 billion this year, while delivering a free cash flow of £2.4 billion.

Fellow blue chip, insurer Old Mutual said that it will return £1 billion to shareholders after selling its long-term savings and banking operations in Sweden, Denmark and Norway for £2.1 billion.

The remaining proceeds of £1.1 billion will be used to reduce deBT, said Old Mutual.

In the oil and gas sector, Tullow Oil (LON:TLW) has signed two new production sharing agreements covering the EA-1 and Kanywataba licences in the Lake Albert Rift basin and said it will now finalise farm-down deals with CNOOC and Total.

In addition, the Ugandan government has granted Tullow a production license for the Kingfisher project.

Fellow oil major Royal Dutch Shell (LON:RDSB) reported lower than forecast growth in sales and profits. As oil prices surged in 2011, the group’s earnings jumped from US$18.6 billion in 2010 to US$28.6 billion last.

The group offered a cautious outlook for 2012, saying the global economy and energy markets are likely to see continued high volatility.

Elsewhere in the top flight, medical devices manufacturer Smith & Nephew (LON:SN.) said it posted a US$279 million profit in the final quarter of 2011 as revenues improved four percent to US$1.1 billion, taking its full year revenues to US$4.27 billion and profits to US$961 million.

Both revenues and profits were ahead of market expectations, which the company said was due to strong revenue growth at its Endoscopy and Advanced Wound Management businesses.

Meanwhile, Unilever (LON:ULVR), which owns the Lipton, Dove and Ben & Jerry brands, reported five percent growth in revenues to €46.5 billion during the year, while its net profits rise marginally from €4.24 billion in 2010 to €4.25 billion.

Unilever said trading conditions during the year were tough, owing to economic uncertainty in Europe and the US, which were offset by the strong performance of emerging markets, where underlying sales jumped 11.5 percent.

“We expect the external macro-economic environment to remain difficult in 2012 and input cost headwinds will persist, although to a lesser extent than in 2011,” said chief executive of Unilever Paul Polman.

Interdealer broker ICAP (LON:IAP) reported that it has managed to reduce its cost base by £20 million compared to the prior year and, as a result, ICAP now expects its profits for the financial year ending March 31 to be at the upper end of current expectations of between £336 and £358 million.

In its interim report in November, ICAP forecast a profit of between £358 and £390 million “based on the assumption that markets normalise in the last quarter”.

In other news, SSE (LON:SSE) revealed the loss of 50,000 electricity and gas customers in Great Britain and Ireland. However, an upbeat profit forecasts helped investors shrug off the decline in customer number.

SSE said its full year profits are set to grow at a similar rate as in the previous three years, while the dividend is also expected to rise.

“This financial year has been characterised by continuing economic uncertainty and ongoing challenges in global energy markets,” said chief executive of SSE Ian Marchant.

Property group British Land (LON:BLND) told the markets it will proceed with the development of the new 700,000 sq ft 5 Broadgate building.

The decision by British Land came after UBS AG agreed to lease the purpose-built building for 18 years.

Demolition of the existing 4 & 6 Broadgate buildings is well underway and will be completed in April to prepare the site for the construction of the new building, which is expected to be completed in the final quarter of 2014.

Finally, Centrica (LON:CNA) announced the acquisitions of a further interest in the Statfjord field in the North Sea, taking the total stake to 34.3 percent.

The British Gas parent company has bought a 15.17 percent interest for £142 million in cash.

The group noted that the deal will also increase its interest in the Statfjord satellites including Statfjord Nord, Statfjord Øst and Sygna, all of which are producing fields tied back to Statfjord.

The deal provides additional reserves of 36 million barrels of oil equivalent to Centrica, an increase of about nine percent. The resulting net increase in daily output will amount to more than 11,000 barrels of oil.