4th Nov 2015 07:20
LONDON (Alliance News) - Multi-commodities miner and trading house Glencore PLC on Wednesday reiterated its full-year earnings guidance and said it aims to have reduced its net debt by up to 15% before the end of the year.
Glencore has been trying to reduce its USD30.0 billion debt pile in an attempt to make the company more competitive in light of lower commodity prices and tougher trading conditions.
It announced debt reduction plans in September to save more than USD10.00 billion in cost savings through a capital raising, asset disposals, suspending its dividend, working capital reductions and other measures.
On Wednesday, Glencore said it aims to have its net debt down to below USD25.00 billion before the end of 2015 and to have net funding of around USD40.00 billion. If it hits that debt target, it would represent a 15% drop from its net debt at the end of June. In the longer term, net debt is expected to fall to the "low USD20s billion" by the end of 2016.
The company also reiterated its full-year guidance to produce earnings before interest and tax of USD2.50 to USD2.60 billion from its marketing division for the full year. Its marketing division is its huge trading arm for commodities around the globe.
Glencore said its marketing arm was "stronger" in the third quarter of 2015 with improved contributions from its metals and minerals and agriculture products.
In terms of production, Glencore said copper production in the first nine months of 2015 was down 2% year-on-year to 1.1 million tonnes, whilst zinc production was up 13% to 1.1 million tonnes.
It also said the Pasar copper smelter is in the process of being ramped up with its newly installed equipment, which will expand its capacity to around 330,000 tonnes of copper.
Coal production in the first nine months was down 8% to 102.7 million tonnes, whilst oil entitlement production was up 57% to 8.0 million barrels.
Nickel production was down 8% to 68,700 tonnes and ferrochrome production was up 14% to 1.1 million tonnes.
The company late Tuesday said its Anani Investments Ltd unit has signed a long-term streaming agreement with a division of Canadian silver miner Silver Wheaton Corp.
The new agreement will see Silver Wheaton make a USD900.0 million advance payment to Glencore and will cover the delivery of silver produced at the Antamina mine in Peru. A streaming agreement is a contract to buy metals at a fixed price.
Glencore said the deal is part of the debt reduction programme outlined in September.
By Sam Unsted; [email protected]; @SamUAtAlliance. Updated by Joshua Warner; [email protected]; @JoshAlliance
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