Glencore adjusted earnings fall

The proceeds will be used to pay down net debt, which is now on track to fall to a revised $16.5 billion to $17.5 billion by year end, down from a previous target of between $17 billion to $18 billion.

Despite a rebound in commodity prices and reduced costs in the six months to end-June, the Swiss company logged a $369 million net loss in the period compared with a $676 million net loss in the same period previous year. Macquarie Global Head of Commodities Research Colin Hamilton discusses miners and commodities with Bloomberg’s Anna Edwards on “Countdown”.

The Swiss firm is also said to be considering the sale of its Vasilkovskoye gold mine in Kazakhstan as part of its asset off-loading and debt management strategy. Supporting these targets, our industrial assets are demonstrating industry-leading cost and cashflow performances, while the resilience of our Marketing business has again been demonstrated, with a 14% increase in its first half Adjusted EBIT to $1.2 billion.

Glencore closed at 184 pence in London, valuing the company at $35 billion. Last year, the company reported a$292m loss at its mining division.

The commodity slump means Glencore now generates most of its cash from trading, as its mines and smelters around the world struggle to make a profit.

Adjusted first-half earnings before interest and tax from the trading unit totaled $1.22bn. BHP CEO Andrew Mackenzie said last week that it’s possible the freefall in commodity prices may be over.

After more than doubling since the end of 2015, its share price fell almost 6 percent by 0948 GMT as analysts focused on news of a $395 million cost on coal hedging. Glasenberg said in March he thought commodity prices had bottomed.

“After a hard start to the year, the more constructive tone of markets in recent months has helped support the pricing of many of our key commodities”, said Ivan Glasenberg, chief executive.

The group’s chief executive Ivan Glasenberg, however, cautioned that while the group was “cash generative at current spot prices”, it remained “mindful that underlying markets continue to be volatile”.