3rd Mar 2015 07:34
LONDON (Alliance News) - Metals and mining giant Glencore PLC Tuesday joined sector peers in slashing its capital expenditure plans, after it reported lower 2014 profits hit by the fall in the oil price and prices for other commodities.
In a statement, the company said its capital expenditure fell to USD8.57 billion in 2014, from a pro-forma USD1132 billion in 2013, and it now expects total industrial capital expenditure for 2015 to be between USD6.5 billion and USD6.8 billion, down from its previous guidance of USD7.9 billion.
Glencore reported a closely watched adjusted earnings before interest, tax, depreciation and amortisation of USD12.76 billion for 2014, down from a pro-forma USD13.07 billion in 2013, while net profit fell to USD2.31 billion, from USD2.47 billion.
Adjusted Ebitda in its industrial unit fell 7% to USD9.8 billion as production growth, cost savings and weaker currencies in the countries in which it produces failed to offset the fall in commodity process, particularly for oil. Adjusted Ebitda in the marketing division rose 15% to USD3.0 billion, buoyed by strong earnings growth in its Agriculture business thanks to strong results from Viterra.
Still, the company will pay a final cash distribution of USD12 cents a share, up 9% on the year, "reflecting our continued confidence in the strength and prospects of the group".
"Our ultimate goal remains to grow our free cash flow and return excess capital in the most sustainable and efficient manner. As the most diversified raw material producer and marketer, Glencore is well positioned to react to and benefit from changes in commodity fundamentals. Glencore will continue to focus on maximising the value of the potential within our businesses. We look forward to the future with confidence," Chief Executive Ivan Glasenberg said in a statement.
By Steve McGrath; [email protected]; @stevemcgrath1
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