Glencore Stock Down As H1 Pre-tax Loss Widens; Cuts Debt

(RTTNews) - Shares of Glencore International Plc. (GLCNF.PK, GLNCY.PK, GLEN.L) declined around 6 percent in London trading after the Commodities trader reported Wednesday wider pre-tax loss in its first half with weak revenues, amid lower commodity prices. Attributable net loss, however, narrowed from last year.

Further, the company said it has continued to reduce net funding and net debt in line with its stated targets. The company remains confident and focussed on achieving even lower net funding of $31 billion - $32 billion and net debt of $16.5 billion - $17.5 billion by the end of 2016.

Loss before income taxes for the first-half widened to $698 million from $683 million in the prior year period.

However, net loss attributable to equity holders of the parent narrowed to $369 million or $0.03 per share from $676 million or $0.05 per share last year.

The latest results included a net $669 million of significant items, including expenses relating to an accounting measurement mismatch, while prior year's results included expenses of $1.558 billion.

Before items, attributable net income was $300 million, compared to $882 million in the prior year.

Funds from operations was $2.762 billion, down 21 percent from $3.487 billion last year.

First-half adjusted EBIT of $875 million decreased 38 percent and adjusted EBITDA of $4.020 billion decreased 13 percent.

The reduction was driven by weaker commodity prices, including copper, coal, zinc and nickel, down 21 percent, 15-20 percent, 16 percent and 37 percent respectively.

Marketing Adjusted EBITDA increased by 9 percent, while Marketing Adjusted EBIT was up 14 percent.

Revenue for the period dropped to $69.43 billion from $73.86 billion in the previous year.

The company continues to expect marketing to deliver $2.4 billion to $2.7 billion Adjusted EBIT for the full year.

Further, Glencore and Evolution Mining (EVN.AX) reached a long term agreement, for delivery of gold and copper calculated by reference to production at the Ernest Henry Mine or EHM in Australia.

Evolution will have a 30 percent economic stake in the mine and be entitled to 100 percent of EHM gold production, subject to an agreed life of mine and block model.

Evolution will pay A$880 million to Glencore upon closing of the transaction as well as ongoing monthly cash contributions equal to 30 percent of production and capital costs associated with copper concentrates.

In London, Glencore shares are currently trading at 179.25 pence, down 5.56 percent.