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By Oliver Griffin
Glencore PLC (GLEN.LN) on Wednesday said it will stop producing at its Mutanda mine by the year end and reported a miss of analysts' expectations for adjusted Ebitda in the first half of 2019.
The Anglo-Swiss miner and commodities trader said it will place Congo copper and cobalt mine Mutanda on care and maintenance by the end of 2019 because of its reduced economic viability in the current market environment, particularly due to lower cobalt prices.
Adjusted earnings before interest, taxes, depreciation and amortization--a key metric for the company, which strips out exceptional items--for the six months ended June 30 fell to $5.58 billion from $8.27 billion in the year-earlier period. An estimate taken from 12 analysts' forecasts and compiled by Vuma Consensus expected adjusted Ebitda of $5.94 billion.
The company said net profit for the first half of the year fell 92% to $226 million. Glencore said the fall in profit was largely due to lower commodity prices and impairments across its portfolio. Revenue fell to $107.1 billion, from $108.6 billion in the first half of 2018 Glencore said.
The fall in earnings follows a mixed first-half production report in July, during which Glencore said it would supply a guidance update for copper and cobalt production for the rest of 2019 alongside its earnings.
In the production report, the company cut its full-year copper output by 1%--reducing its expected output for the year by 10,000 tons due to issues at the Mopani mine in Zambia--and said its African copper business hadn't performed to expectations.
Glencore's majority-owned Katanga Mining Ltd. (KAT.T) in April launched a review to look at improving operations and said full-year output of copper and cobalt was expected to be less than the previous respective guidance of 285,000 tons and 26,000 tons.
Following the completion of the first stages of the review, Glencore said it now expects copper and cobalt production at Katanga in 2019 of 235,000 tons of copper and 14,000 tons of cobalt.
Glencore said Mutanda will continue to evaluate its operations and production at the mine will recommence production once economic conditions sufficiently improve.
Write to Oliver Griffin at email@example.com; @OliGGriffin
(END) Dow Jones Newswires
August 07, 2019 02:37 ET (06:37 GMT)
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