Glencore share price volatile as miner swings to net loss

Glencore (LON:GLEN) has become the latest London-listed miner to reveal the impact of weak commodity prices on its 2015 performance, posting its worst results since it became a public company in 2011. The Swiss group, which last year announced a sweeping plan to reduce its debt pile, said today that it was targeting net debt of about $15 billion by the end of next year.

Glencore’s share price has been swinging between gains and losses this morning, with investors digesting the group’s full-year update. As of 09:05 GMT, the shares were changing hands 1.22 percent lower at 131.63p, having traded more than one percent higher earlier in the session. In the year-to-date, the shares are up 45.28 percent, but have fallen 56.22 percent on a 12-month basis.
Glencore announced a net loss attributable to equity holders of $4.96 billion for 2015, as compared with net income of $2.31 billion in 2014. The group’s adjusted earnings before interest, taxes, depreciation and amortisation meanwhile slipped 32 percent year-on-year, reflecting ‘sustainably weaker commodity prices’. The Swiss group joins FTSE 100 peers Rio Tinto (LON:RIO) and BHP Billiton (LON:BLT) which have also posted plunging profits on the back of the ongoing commodities rout.

Glencore unveiled asset sales of $1.6 billion to date, and said that it was confident of achieving further disposals of between $4 billion and $5 billion during the remainder of the current year. The company’s net debt stood at $25.8 billion at the end of 2015, down from $30 billion a year ago, slightly below the company’s target. The FTSE 100 miner is now planning to have net debt of between $17 billion and $18 billion by the end of the year, and $15 billion by the end of next year.
“Our rigorous focus on debt reduction, supply discipline and cost efficiencies enabled Glencore to record a robust performance in difficult market conditions,” the company’s chief executive Ivan Glasenberg said in the group’s results statement, adding that the group’s “diversified portfolio […] underpins our ability to continue to be comfortably cash generative at current and even lower commodity prices”.
As of 09:26 GMT, Tuesday, 01 March, Glencore Xstrata PLC share price is 133.90p.

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