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Glencore back to profit despite plunging commodity prices

Tuesday, March 3, 2015 - 18:48

[GENEVA] Mining and commodities giant Glencore was back in the black in 2014, posting a US$2.3 billion net profit, but took a US$1.1 billion impairment charge on dwindling commodity prices, it said Tuesday.

The healthy profit comes after the Swiss company suffered an US$8.0 billion loss a year earlier.

However, taking into account the group's absorption of Swiss mining giant Xstrata, the Swiss company saw its results on a comparable pro forma basis slip seven percent from the year before.

The merger with Xstrata and integration of Canadian company Viterra meanwhile helped boost Glencore's trade, and the company said its adjusted earnings before interest, taxes, depreciation and amortisation, swelled 18 per cent to US$2.8 billion.

But the company took a US$1.1 billion impairment charge amid plunging commodity prices, especially in the energy sector.

Glencore warned last month that because of "volatile" market conditions, it aimed to slash its spending this year to US$6.5-6.8 billion, down from the US$7.9 billion announced to investors in early December.

Glencore, which has a heavy footprint in copper, coal and oil, as well as in the agriculture commodities sectors, also said it aimed to reduce its coal mine activities in South Africa and in Australia.

"Our ultimate goal remains to grow our free cash flow and return excess capital in the most sustainable and efficient manner," Glencore chief executive Ivan Glasenberg said in the earnings statement.

"As the most diversified raw material producer and marketer, Glencore is well positioned to react to and benefit from changes in commodity fundamentals," he added.

The company's board aims to propose hiking the dividend paid to shareholders by nine per cent to 18 cents a share, the company said. AFP

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