Glencore profits fall 70% amid commodity slump

Oil Drums

Glencore, the FTSE 100 mining and trading company, has reported a 70% fall in annual profits as the commodities slump took its toll on the mining sector.

Glencore’s net income excluding significant items tumbled 69% to $1.34bn (£960m) last year, from $4.28bn the previous year. The Switzerland-based company took exceptional charges of $5.8bn related to impairments, restructuring costs and losses on asset sales.

Adjusted earnings before interest, tax, depreciation and amortisation fell 32% to $8.69bn, in line with analysts’ forecasts.

Glencore’s share price fell back 4% on the market opening on Tuesday, before settling back to around 2.5% down at 130p.

Like other miners, Glencore has been hit hard by the collapse in commodity prices linked to slowing demand from China. The company has slashed production of zinc, coal, copper and oil as well as cutting investment and costs, including jobs. It has sold off $1.6bn of assets and is confident of achieving a further $4-5bn of asset sales this year.

The embattled firm’s chief executive, Ivan Glasenberg, said: “Our rigorous focus on debt reduction, supply discipline and cost efficiencies enabled Glencore to record a robust performance in difficult market conditions.”

Glencore shares have more than halved over the past year. When the company floated in London in 2011, the shares were priced at 530p.

China announced on Monday that it would lay off 1.8 million workers in its coal and steel industries, or about 15% of the workforce, as part of efforts to reduce industrial overcapacity.

Powered by Guardian.co.ukThis article was written by Julia Kollewe, for theguardian.com on Tuesday 1st March 2016 08.35 Europe/Londonguardian.co.uk © Guardian News and Media Limited 2010

 

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