1st Mar 2016 07:19
LONDON (Alliance News) - Glencore PLC accelerated its debt reduction plans once again on Tuesday, aiming to sell more assets than previously thought, as the miner and commodities trader reported results that either met or beat expectations in 2015 despite substantial declines in earnings.
Glencore reported net income before exceptional items of USD1.34 billion in 2015, a 69% drop from USD4.28 billion in 2014, but slightly higher than analysts expectations of only USD1.16 billion.
Adjusted earnings before interest, tax, depreciation and amortisation was bang on analyst expectations at USD8.69 billion, but that is still a 32% fall from USD12.76 billion in 2014. Adjusted Ebit was down 68% year-on-year to USD2.17 billion from USD6.70 billion.
Glencore's marketing arm, which trades commodities, reported adjusted Ebit of USD2.70 billion in 2015, down 11% from the year before and slightly higher than the USD2.48 billion expected by analysts and the USD2.50 billion guided by Glencore in December.
That led Glencore to swing to an ultimate net loss after items of USD4.96 billion in 2015 from the USD2.30 billion profit reported last year.
Net debt at the end of 2015 stood at USD25.88 billion, down 15% from USD30.53 billion at the end of 2014. Glencore was aiming to have net debt at the end of the year of USD25.00 billion.
Glencore accelerated its net debt target again on Tuesday, and said it hopes to have net debt down to USD17.00 to USD18.00 billion by the end of 2016, compared to its previous target of USD18.00 to USD19.00 billion.
Glencore said it has made asset sales worth USD1.60 billion to date, and said it expects to reach an agreement to sell a minority stake in its agricultural business in the second quarter of 2016. It has also received bids for the two copper mines it is looking to sell and said it is considering "further monetisation" of its remaining precious metals production base, alongside other infrastructure and logistic assets.
Overall, Glencore is confident of making asset sales totalling USD4.00 billion to USD5.00 billion in 2016, higher than its previous USD3.00 billion to USD4.00 billion target.
In the longer term, that will lead net debt to be below USD15.00 billion by the end of 2017, the company said.
Glencore's balance sheet remains strong, it said, with USD15.20 billion of available liquidity at the end of 2015.
By Joshua Warner; [email protected]; @JoshAlliance
Copyright 2016 Alliance News Limited. All Rights Reserved.
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