4th Mar 2014 08:43
LONDON (Alliance News) - Glencore Xstrata PLC Tuesday reported an unexpected increase in full-year 2013 revenues, beating market expectations and leading to a rise in net profit before significant items during the period.
The major mining and commodities trading company said its net profit before significant items, related to its merger with Xstrata in May, increased 20% to USD3.67 billion from USD3.06 billion the previous year, though this figure was lower than analyst consensus expectations of USD3.80 billion.
The company said its reported revenues increased by 8.5% to USD232.69 billion from USD214.44 billion in 2012. This increase was unexpected by the market, as analyst consensus figures expected revenues to fall to roughly USD149.67 billion during the period.
Glencore said its revenues increased as strong production figures and successful integration of Xstrata offset lower commodity prices during 2013.
The company also announced a less-than-expected decline in underlying earnings per share before significant items, at 33 cents from 44 cents, with analyst consensus figures predicting a fall to 29 cents.
Glencore recommended a 4.8% higher final dividend of USD11.1 cents per share, bringing its full year payment to USD16.5 cents.
The statutory results included the integration of Xstrata for only part of the year, as well as a number of impairments.
The company said it has substantially delivered on the planned annual synergies from its Xstrata merger in May, achieving USD2.4 billion in cost savings. Glencore added that the full benefit of the merger is expected to be realised in 2014, with implementation costs of USD300 million, which have mostly been incurred during 2013.
Glencore also said the disposal process of its Las Bambas copper project in Peru, which is expected to be sold for roughly USD5 billion and is committed to be completed by September 30, 2014, is ongoing.
"As we look ahead to 2014, we continue to see healthy demand growth in all our key commodities, underpinned by the long-term trend of urbanisation in emerging markets and parts of the developed world returning to trend growth," Chief Executive Officer Ivan Glasenberg said in a statement.
The company announced in February that it had increased production across the majority of its portfolio of assets in its full-year, with its total own-sourced copper production increasing 26% to 1.5 million tonnes, driven specifically by strong results from its multiple African copper sites, as well as the Collahuasi mine in Chile, Antapaccay mine in Peru, and Ernest Henry site in Australia.
Glencore said that during the period it successfully started production of the Alen oil field in Equatorial Guinea and Badila oil field in Chad, while a new resources and reserves report produced earlier in February said that the company has increased its proved and probable net oil reserves 129% to 87 million barrels of oil equivalent.
The report also showed a significant growth in its Mutanda copper ore reserves and mineral resources in the Democratic Republic of Congo, which were up, respectively, 23% and 25%, to 2.0 million and 7.4 million tonnes of contained copper, and an increase in the company's iron ore mineral resources by 21% to 4.6 billion tonnes of contained iron.
Glencore shares were up 2.3% to 333.90 pence, making it the fifth biggest FTSE 100 gainer in early trading Tuesday.
By Tom McIvor; [email protected]; @TomMcIvor1
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