You are here

S&P cuts Glencore outlook to negative on weak commodities

Thursday, September 3, 2015 - 11:05
glencore blg.jpg
Standard & Poor's on Thursday cut its outlook for Glencore Plc to 'negative' from'stable' after slashing its price forecasts for metals.

[SYDNEY] Standard & Poor's on Thursday cut its outlook for Glencore Plc to 'negative' from'stable' after slashing its price forecasts for metals and amid uncertainties about China's economic outlook.

The mining and commodities firm posted a 29 per cent slump in first-half earnings in August and cut its forecast for earnings from trading, citing tough market conditions. "Continued weakness and volatility in commodity prices resulting notably from a more uncertain and challenging outlook in China may put additional pressure on operations, credit measures, and free cash flow," S&P said.

It added that credit metrics for Glencore were relatively weak for the 12 months to June 30 while spot prices for some commodities were below its price assumptions.

However S&P affirmed Glencore's long-term corporate credit rating at 'BBB' and its short-term rating at 'A-2', and noted the company's efforts to strengthen its credit profile by focusing on debt reduction and cost cutting measures.

Last week, S&P warned BHP Billiton's investment-grade credit ratings might come under pressure in the current financial year.

REUTERS

Powered by GET.comGetCom