MINING giant Glencore reported a sharp improvement in first-half performance, marking a big switch back into profit.
Subscribe now for unlimited access.
$0/
(min cost $0)
or signup to continue reading
Glencore, which runs major employers Mount Isa Mines and Ernest Henry Mining in Cloncurry, came into being with a mega-merger last year, said it had made a net profit of $US1.72billion ($1.86 billion) during the first half of 2014, up from a $US9.39-billion loss a year earlier.
The deep loss during the first half of 2013 was largely due to massive write-downs after Swiss commodities group Glencore’s merger with Switzerland-based mining company Xstrata.
Cost-cutting since then had allowed the company to return to growth and to grow its cash holdings, it said on Wednesday.
During the six-month period, Glencore Xstrata saw an 8 per cent rise in its adjusted earnings before interest, taxes depreciation and amortisation to $US6.46 billion, which it largely put down to the Xstrata acquisition.
‘‘Glencore continued to make decisive progress in delivering on the potential created by the Xstrata acquisition over the first half of 2014,’’ company chief executive Ivan Glasenberg said in the statement.
‘‘We look to the future with optimism based on our strong starting point and our culture of entrepreneurialism and hard work to leverage tightening commodity fundamentals.’’
The company acknowledged that commodity prices remained low, but stressed that this was not due to weak demand, but rather excessive supply – a trend it anticipated would soon turn.
Glasenberg pointed out that prices for nickel and zinc had already increased significantly since the beginning of the year, adding that he expected most other commodities, with the exception of iron ore, to soon follow suit.
In a separate announcement, the company acknowledged its zinc production had slipped 11 per cent during the first half of the year to 650,400 tonnes, largely due to the closure of its exhausted Canadian Perseverance and Brunswick mines.
It also saw nickel production drop 8 per cent to 49,100 tonnes.
Copper output meanwhile jumped 13 per cent to 714,000 tonnes, while Glencore’s crude oil production soared 41 per cent to 14 million barrels.
After the news, the company saw its share price rise 0.39 per cent to 360.45 pence in morning trading on the London stock exchange.