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Glencore posts heavy losses in first six months
Photo: AFP

Glencore posts heavy losses in first six months

AFP · 19 Aug 2015, 14:30

Published: 19 Aug 2015 14:30 GMT+02:00

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In the first half of 2014, Glencore, headquartered in the canton of Zug, recorded profits of $1.7 billion.
Its shares have fallen by 40 percent this year, a plunge that has been 
driven in part by growing fears about a slowdown in China — the world's top commodities consumer.
But Glencore's record has also been dampened by an impairment of its 
recently acquired oil operation in Chad as well as bankruptcy proceedings at its Optimum Coal mine in South Africa.
"The first half of 2015 was another challenging one for commodities," 
Glencore said in a statement.

"Commodity prices are now at levels not seen 
since the financial crisis of 2008/2009."
Billionaire CEO Ivan Glasenberg however said the company was "well 
positioned to benefit from any improvement in pricing when it finally and inevitably materializes."
Setting aside exceptional developments, including the impairment in Chad, 
Glencore posted a first-half profit of $882 million.
That figure marked a 56 percent decline compared with the same time period 
last year.
"We have taken a range of actions in respect of our balance sheet, 
operations and capital spending," Glasenberg said, adding that the company was committed to preserving its credit rating and payouts to shareholders.
The firm last week announced its second cut in projected spending for 2015, 
lowering the figure to $6.0 billion, after an initial projection of $7.9 billion announced in December.
Glencore's large trading unit also saw a 29 percent decline in profits 
compared to the first half of 2014, bringing in $1.1 billion in profits, excluding exceptional events.
The company's "trading arm had previously been viewed as a way of hedging 
their exposure to a fall in commodity prices, but has also contributed to poor results," said Rebecca O'Keeffe, head of investment at Stockbroker - Interactive Investor.

Troubled operations in Africa

Glencore purchased its oil business in Chad only last year, but low crude prices led to it being devalued by $790 million dollars, the company said last week.
Bankruptcy proceedings have begun at its Optimum Coal operation in South 
Africa, with Glencore citing "unsustainable financial hardship" in its relationship with the state power generator Eskom, which Optimum had supplied.
After Glencore announced hundreds of job losses in South Africa last month, 
Pretoria immediately sought to negotiate a solution.
on Wednesday said "there is a reasonable prospect of rescuing Optimum," if the supply agreement with Eskom can be renegotiated.
The company's stocks had fallen six percent to 165.50 pence in early 
trading on the London exchange.

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