Higher Prices Lift Glencore -- WSJ
August 11 2017 - 3:02AM
Dow Jones News
By Scott Patterson
This article is being republished as part of our daily
reproduction of WSJ.com articles that also appeared in the U.S.
print edition of The Wall Street Journal (August 11, 2017).
Swiss mining and trading giant Glencore PLC reported strong
first-half results on Thursday, benefiting from rising commodity
prices as it continues to recover from a downturn that sparked
widespread worries about its financial health and caused an
investor revolt.
Glencore, one of the world's largest coal, copper and zinc
producers, reported a $2.5 billion net gain for the first six
months through June, compared with a $369 million net loss in the
same period a year earlier. It posted a net gain of $1.4 billion
for all of 2016.
"Rising commodity prices have naturally had a very strong
favorable effect on our performance," Chief Executive Ivan
Glasenberg said Thursday.
Glencore shares fell 2% in early trading in London.
The earnings update closely follows other strong reports from
global diversified miners. Rio Tinto PLC reported a net profit of
$3.3 billion in the first half, up from $1.7 billion a year
earlier, fueled by a 25% gain in revenues. Anglo American PLC
reported first-half net income of $1.4 billion, compared with a net
loss of $813 million last year.
Glencore expects commodity markets to remain strong in the
second half of the year, saying it anticipates that its trading
division will report earnings before interest and taxes for 2017 in
the range of $2.4 billion to $2.7 billion, a $100 million increase
from its previous guidance.
"The second half has started well," said Chief Financial Officer
Steven Kalmin.
Mr. Glasenberg highlighted the rise of electric vehicles as a
growing trend that is driving demand for several of the firm's most
important commodities. "The potential large-scale roll out of
electric vehicles and energy storage systems looks set to unlock
material new sources of demand for enabling commodities, including
copper, cobalt, zinc and nickel," he said.
The company is the world's biggest producer of cobalt, a key
commodity in the lithium-ion batteries that power electric vehicles
and mobile phones. Cobalt prices were up 109% in the first half
from the same period last year, it said.
Glencore's first-half revenue rose 44% to $100 billion compared
with the same period a year ago, helped by rising and resilient
copper, coal and zinc prices. The firm's trading division posted
earnings before interest and taxes of $1.4 billion in the first
half of the year, a 13% gain from a year ago.
Net debt was $13.9 billion, down from $15.5 billion at the end
of 2016.
Corrections & Amplifications Steven Kalmin is Glencore's
chief financial officer. An earlier version of this article
incorrectly spelt Mr. Kalmin's name. (Aug. 10, 2017)
Write to Scott Patterson at scott.patterson@wsj.com
(END) Dow Jones Newswires
August 11, 2017 02:47 ET (06:47 GMT)
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