Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 

4-Traders Homepage  >  Equities  >  London Stock Exchange  >  Glencore PLC    GLEN   JE00B4T3BW64

Delayed Quote. Delayed  - 08/24 05:35:27 pm
184 GBp   -3.06%
06:29pDJGlencore Reports Narrower Loss, Cuts Debt -- 4th Update
06:00p GLENCORE : defends $395-million loss for hedging coal production, sa..
11:39aDJGLENCORE : Reports Narrower Loss, Cuts Debt -- 3rd Update
SummaryQuotesChartsNewsAnalysisCalendarCompanyFinancialsConsensusRevisions 
News SummaryMost relevantAll newsSector news 

Trading cushions Glencore's 2012 profit drop

share with twitter share with LinkedIn share with facebook
share via e-mail
0
03/05/2013 | 08:54pm CEST

A rise in profits from trading helped Glencore offset lower prices in 2012, with net income down by a quarter as the commodities group prepares to seal a $34 billion (22.4 billion pounds) takeover of miner Xstrata.

The headline drop, modest relative to a bruised sector, was a vindication for former trader and Glencore boss Ivan Glasenberg, who has long extolled the marketing arm's ability to grow in tough conditions. Trading growth, though, came largely from agricultural products, rather than mainstays coal and oil.

Glasenberg's pronouncements on the strategy of the combined trading and mining giant have been keenly awaited and he said on Tuesday that he was optimistic the group would soon receive an approval from Chinese regulators, the last remaining hurdle.

Glencore said China's Ministry of Commerce was probing areas including the supply of copper concentrate, the raw material for copper smelters, among other markets.

But Glasenberg gave away few specifics on his plans for the merged group, sticking with what he said was a focus on investor returns and an intention to grow the proportion of profit coming from marketing, a slice which will shrink to roughly 30 percent immediately after the deal completes.

"(Incoming Rio Tinto Chief Executive) Sam Walsh said at the Rio presentation that they are now going to act like owners. We don't need to act like owners, we are owners," he told analysts.

That means, Glasenberg said, an opportunistic approach to deals, from a marketing agreement and share purchase in unlisted Brazilian iron ore producer Ferrous last week, to a bumper oil funding deal with Russia's Rosneft.

It also means taking advantage of the travails of large diversified players, who are under scrutiny from shareholders as boom-time acquisitions sour, placing more assets on the block.

"Those opportunities will be there, that is something new in the industry," Glasenberg said. "Competition will be less fierce than before. A lot of the mining companies are reassessing their portfolios, they are hanging back, there are new CEOs and, like all of us, they are under pressure from investors."

Glasenberg said he expects to review the combined portfolio of projects. "Greenfield" projects, or those built from scratch, unlikely to find favour as the Glencore team proclaimed itself "afraid" of potential delays and excessive spending.

Glencore has been expected to mothball or jettison many of Xstrata's greenfield growth assets, including some in tough jurisdictions such as Argentina. More advanced greenfield projects like copper mine Las Bambas in Peru and nickel mine Koniambo in New Caledonia could remain.

Glasenberg's review has already caused friction between the two management teams, long-time rivals and soon-to-be partners.

Glencore's boss, however, was sanguine on the potential effects, saying his focus was on the managers at the mines, not middle managers. The comments are likely to fuel speculation over the departure of Xstrata divisional bosses, including its head of copper, Charlie Sartain. Glasenberg declined to comment.

"Immediately after the merger, you will see a structure in place, ideally the way Glencore would like it," he said.

He said big deals were not off the agenda for the group, which snapped up both Xstrata and grain handler Viterra in 2012, though regulatory clearances could be expected to take longer.

This could include iron ore, where Glasenberg said he would review operations put up for sale by Rio.

WRITEDOWNS, DIVIDENDS UP

Glencore and Xstrata shares rose on Tuesday, as both met or exceeded market forecasts, dividends ticked higher and the sector recouped losses. Glencore closed up 5.7 percent and Xstrata up 6.8 percent, outperforming a 3.5 percent rise in the broader UK mining sector.

Neither, though, was immune to the impact of falling commodity prices last year.

Glencore's 2012 net income fell to $3.06 billion, in line with expectations. That excluded the impact of an impairment relating to a reclassification of its holding in Russian aluminium producer RUSAL after losses.

Its adjusted operating profit, or earnings before interest and tax (EBIT), dropped 17 percent, with a 27 percent drop in Glencore's industrial division accounting for the bulk of the weakness. Its trading division saw profit rise 11 percent, helped by a jump in earnings from oilseeds and grain.

Xstrata, reporting separately from Glencore for what should be the last time before the two merge, beat expectations but wrote down the value of nickel, zinc and platinum assets which dragged its net profit almost 80 percent lower.

The writedowns included a $978 million hit as Xstrata wrote down assets including its Australian nickel operations and platinum, and also $840 million on its investment in troubled South African platinum miner Lonmin.

Excluding the writedown, its profit dropped 37 percent.

Glencore expects to complete the Xstrata merger by April 16.

(Editing by Jason Neely and Grant McCool)

By Clara Ferreira-Marques

Stocks treated in this article : Glencore International Plc, Xstrata AG
share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news on GLENCORE PLC
06:29pDJGlencore Reports Narrower Loss, Cuts Debt -- 4th Update
06:00p GLENCORE : defends $395-million loss for hedging coal production, says decision ..
11:39aDJGLENCORE : Reports Narrower Loss, Cuts Debt -- 3rd Update
11:00a GLENCORE : Commodities giant Glencore trims loss after asset sales
10:15aDJGlencore Reports Narrower Loss, Cuts Debt
10:15aDJStocks Slip, Along With Oil Prices
10:06a GLENCORE : Commodities group Glencore trims loss in first half of 2016
09:47aDJGLENCORE : Reports Narrower Loss, Cuts Debt -- 2nd Update
09:37a LONDON MARKET OPEN : WPP Shines As Miners Drag On FTSE 100
09:07aDJGLENCORE : Reports Narrower Loss, Cuts Debt -- Update
More news
Sector news : Coal - NEC
08/11 CHINA SHENHUA ENERGY : Australia to pay BHP $170 million to repurchase coal expl..
08/09DJCHINA SHENHUA ENERGY : 1st-Half Net Profit Down 19.3%
07/12DJASIA MARKETS : Pokémon Mania Spurs Second Day Of Rally In Japan
07/12DJASIA MARKETS : Pokémon Mania Spurs Second Day Of Rally In Japan
07/11DJCHINA COAL ENERGY : Expects to Swing to Jan-June Net Profit of CNY350 Million-CN..
More sector news : Coal - NEC
News from SeekingAlpha
11:02a Glencore's (GLCNF) CEO Ivan Glasenberg on Q2 2016 Results - Earnings Call Tra..
07:40a Glencore reports 1H results
07:00a WALL STREET BREAKFAST : Pfizer To Buy AstraZeneca Antibiotics Ops
04:06a Glencore H1 net profit falls 66%; announces $670M Australia deal
02:54a Glencore Plc 2016 Q2 - Results - Earnings Call Slides
Advertisement
Financials ($)
Sales 2016 159 952 M
EBIT 2016 2 493 M
Net income 2016 906 M
Debt 2016 27 467 M
Yield 2016 0,17%
P/E ratio 2016 45,60
P/E ratio 2017 26,08
EV / Sales 2016 0,40x
EV / Sales 2017 0,36x
Capitalization 35 892 M
More Financials
Chart GLENCORE PLC
Duration : Period :
Glencore PLC Technical Analysis Chart | GLEN | JE00B4T3BW64 | 4-Traders
Full-screen chart
Technical analysis trends GLENCORE PLC
Short TermMid-TermLong Term
TrendsNeutralBullishBullish
Technical analysis
Income Statement Evolution
More Financials
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 23
Average target price 2,58 $
Spread / Average Target 2,9%
Consensus details
EPS Revisions
More Estimates Revisions
Managers
NameTitle
Ivan Glasenberg Chief Executive Officer & Executive Director
Anthony Bryan Hayward Independent Non-Executive Chairman
Steven F. Kalmin Chief Financial Officer
Peter Roland Coates Non-Executive Director
William Edward Macaulay Independent Non-Executive Director
More about the company
Sector and Competitors
1st jan.Capitalization (M$)
GLENCORE PLC116.84%35 892
CHINA SHENHUA ENERGY C..0.07%43 131
COAL INDIA LTD2.27%31 690
CHINA COAL ENERGY COMP..-7.27%9 643
SHAANXI COAL INDUSTRY ..16.46%8 521
WINTIME ENERGY CO LTD-14.47%7 637
More Results