Glencore International Plc (GLEN.L, GLNCY.PK, GLCNF.PK), which is merging with its 34-percent owned mining group Xstrata Plc (XTA.L), Tuesday reported a decline in its first-half profit, reflecting a fall in commodity prices. However, revenues grew 17 percent helped by higher oil volumes handled and a marginal increase in average oil price.
The Swiss commodity trader noted that the global economy and financial markets were weighed down by the European sovereign debt crisis and average prices for many key own produced commodities fell between 14 and 28 percent.
Ivan Glasenberg, chief executive officer of the company said, "Looking forward, we neither anticipate nor assume any material improvement in overall market or economic conditions in the near term."
The company said its metals and minerals and agricultural segments performing strongly, while energy results fell from the relatively strong prior-year period.
In the latest first half, the company's profit before tax decreased to $2.2 billion from $2.47 billion in the previous year and FFO fell 10 percent to $1.93 billion.
Net income attributable to equity holders decreased 8 percent to $2.28 billion. On a per share basis, earnings were $0.32, lower than $0.53 per share reported last year.
Adjusted EBITDA, a key earnings measure, dropped 17 percent to $3.2 billion in the prior year, but was up 22 percent from last year's second half.
However, revenues for the recent six-month period grew17 percent to $107.96 billion, reflecting mainly higher oil volumes handled and a slightly higher average oil price, partially offset by lower metals prices.
During the half year, Glencore recognized $466million of other significant income, comprising a net $497 million accounting gain mainly related to revaluation of 40 percent interest in Mutanda held prior to acquisition of an additional 20 percent interest in April this year.
The board has declared an interim dividend of $0.054 per share, up 8 percent from last year, to shareholders of record on August 31, payable on September 13.
In London, Glencore shares are currently trading at 349.75 pence, down 4 pence or 1.13 percent, on a volume of 3.56 million shares.
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