19th Aug 2015 06:18
LONDON (Alliance News) - Glencore PLC on Wednesday reported a substantial fall in earnings, as expected, in the first half of the year, due to weaker commodities and oil prices and following the company's mixed production results earlier this month.
The FTSE 100-listed multi-commodity miner reported earnings before interest, tax, depreciation, amortisation and exceptional items of USD4.61 billion in the first half of 2015, down 29% from USD6.46 billion a year earlier.
Ebit before exceptional items was down 61% to USD1.42 billion from USD3.62 billion, with the fall in earnings mainly caused by the fall in commodity prices.
Marketing Ebitda was down 27% to USD1.20 billion with an Ebit of USD1.10 billion, down 29%, both caused by "tough metals' trading conditions," particularly aluminium and nickel affected by the collapse in physical premiums and subdued levels of global stainless steel production. Industrial Ebitda was down 29% to USD3.40 billion.
Glencore said it expects "better second half contributions from metals and agriculture to underpin full year Marketing EBIT guidance of USD2.50 to USD2.6o billion".
Net debt at the end of the first half had fallen to USD29.60 billion, compared to USD30.50 billion at the beginning.
Glencore already released its production figures for the first half earlier in August and the results were mixed. Copper, lead, coal, gold and silver production all fell in the period with zinc, ferrochrome and oil being the only areas experiencing a lift year-on-year.
The miner also slashed its capital expenditure budget earlier in August after spending USD3.0 billion in industrial capital expenditure in the first half. That is now expected to total USD6.0 billion for the full year, down from its previous guidance range of USD6.50 to USD6.80 billion.
Glencore also said it would book a USD790 million impairment related to its assets in Chad due to the decline in oil prices.
"Our core industrial assets remain well positioned on their respective cost curves. We remain by far the most diversified commodity producer and marketer and are well positioned to benefit from any improvement in pricing when it finally and inevitably materialises," said Chief Executive Ivan Glasberg.
By Joshua Warner; [email protected]; @JoshAlliance
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