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Glencore profits hit by weak commodity prices | Glencore profits hit by weak commodity prices |
(about 1 hour later) | |
Mining giant Glencore has reported a 32% drop in full-year profits after being hit by weak commodity prices. | Mining giant Glencore has reported a 32% drop in full-year profits after being hit by weak commodity prices. |
It said earnings were $8.7bn (£6.24bn) down from $12.8bn in 2014, after writing down assets by $5.8bn. | It said earnings were $8.7bn (£6.24bn) down from $12.8bn in 2014, after writing down assets by $5.8bn. |
Most companies in the mining sector have had to write down the value of assets to reflect the fall in commodity prices. | Most companies in the mining sector have had to write down the value of assets to reflect the fall in commodity prices. |
Glencore said it was aiming for $4bn-$5bn of asset disposals in 2016, plus a further $400m in savings. | Glencore said it was aiming for $4bn-$5bn of asset disposals in 2016, plus a further $400m in savings. |
'Robust performance' | |
Glencore is in the throes of trying to reduce $30bn of debt, which it accumulated through its ambitious takeover of Xstrata in 2013. | |
That deal added dozens of mines in numerous countries to the commodity trader's business leaving it as one of the world's biggest miners and traders of the products of those mines. | |
In September last year, Glencore's shares dived after a note from analysts at Investec said its equity value could be "eliminated", although Glencore responded that it was "operationally and financially robust". | |
Glencore has so far cut metal production, suspended dividend payments to shareholders, sold assets and is issuing new shares to raise money. | |
Underlying earnings at its mining operations fell 38% to $6bn. Its trading arm, which trades and ships commodities all over the world, saw earnings drop 11% to $2.7bn, in line with expectations. | |
Glencore 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." | |
The company's shares are listed in London and Hong Kong, although its headquarters are in Switzerland. In London, its shares were up 1.73% to 135.55p in early morning trading. | |
When Glencore listed on the London market in 2011 it priced its shares at 530p. However, since then its share price has slid - along with the rest of the mining sector. | When Glencore listed on the London market in 2011 it priced its shares at 530p. However, since then its share price has slid - along with the rest of the mining sector. |
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