Swiss commodities producer Glencore says it narrowed its net loss in the first half of 2016, after paring down billions of dollars’ worth of assets to slash debt amid a hard market for raw materials.
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Glencore (GLNCY), the world’s No.3 mining company by market value, posted first-half earnings per share of $0.02, down from $0.07 year-on-year as weak commodity prices led to a 66% decline in first half income.
He said an upturn in commodity markets had helped, but the company remained “mindful that underlying markets continue to be volatile”. The Glencore Agri stake sale, for example, positions it for the industry’s inevitable consolidation in the years to come. The company, which has been looking to reduce its massive debt pile, said that it was now targeting net debt of between $16.5 billion and $17.5 billion by the end of the year, against a previous target of between $17 billion and $18 billion.
“Our industrial assets are demonstrating industry leading cost and cash flow performance, while the resilience of our marketing business has again been demonstrated”, said Glencore’s billionaire CEO Ivan Glasenberg in a statement.
The results squared with analysts expectations, which had been adjusted downward after Glencore reported weaker than expected production figures earlier this month.
Last year’s collapse in commodities and Glencore shares forced the firm to roll out a rescue strategy that included scrapping its dividend, selling $2.5 billion of stock, disposing of assets and slashing spending.
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UBS analyst Myles Allsop said the first half results were “encouraging with fast deleveraging increasing potential for [a] dividend in March 2017”. Glencore earlier today announced a $670m deal to sell future output from an Australian gold and copper mine.
