4th May 2016 06:29
LONDON (Alliance News) - Glencore PLC said Wednesday production of the majority of its commodities fell during the first quarter of the year due to planned cuts, but said its full-year guidance remains intact apart from its oil unit which has made a slight reduction to its target.
Glencore made proactive production cuts in 2015 in response to declines in commodity prices and excessive supply in some markets, leading to year-on-year reductions in production of copper, zinc, lead, coal and oil in the first quarter of 2016.
Copper production from Glencore's own sources was 4.0% lower in the quarter at 335,000 tonnes following suspensions at its mines in Africa, partly offset by increased production in South America.
Zinc production was down 28% in the first quarter compared to a year earlier at 257,100 tonnes after reductions in production from operations in Australia, Peru and Kazakhstan.
Coal production was 17% lower year-on-year in the first quarter at 29.7 million tonnes after the loss of production from Optimum Coal from August 2015 and due to some mining restrictions in Colombia.
Nickel production was one of the only segments to see production rise in the quarter, experiencing a 16% year-on-year lift to 27,600 tonnes. Agricultural Products, in which Glencore has recently sold a substantial stake, saw crushed volumes lift by 89% in the period due to improved macro-economic conditions in Argentina and the contribution from acquisitions made in 2015.
Overall, Glencore's full-year production guidance remains intact, apart from its oil E&P division which has reduced its full-year target by 300,000 barrels due to "reductions in the drilling campaign".
The marketing division that sells and trades Glencore's production as well as third-party material is also still expected to deliver USD2.40 billion to USD2.70 billion of earnings before interest and tax in 2016.
By Joshua Warner; [email protected]; @JoshAlliance
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