Equities By Region Mining UK

Glencore share price dips even as group posts rise in half-year earnings

Shares in Glencore (LON:GLEN) have lost ground in London in today’s session even as the company posted a rise in half-year earnings. The results come as the group faces a legal challenge, having recently received a subpoena from the US Department of Justice relating to possible corruption and money-laundering.

As of 14:29 BST, Glencore’s share price had given up 0.32 percent to 325.27p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.75 percent higher at 7,776.19 points. The group’s shares have lost nearly six percent of their value over the past year, as compared with about a three-percent gain in the Footsie.

Glencore posts results

Glencore announced in a statement today that its adjusted earnings had jumped 23 percent to $8.3 billion in the first-half of the year, while the group’s basic earnings per share rose 12 percent to $0.19.

“Against a volatile but favourable trading and commodity price environment, Marketing performed towards the upper end of its guidance range with a 12-percent increase in adjusted EBIT to $1.5 billion,” the commodities giant’s chief executive Ivan Glasenberg commented in the statement, cautioning, however, that the broader market conditions were likely to remain volatile.

Analysts weigh in on update

The Telegraph quoted Graham Spooner of The Share Centre as commenting that the legal woes were likely to continue to dog the commodities giant despite its rising cash pile and falling net debt which is likely to drop below the $9-billion level over the year.

“Political and legal risks surrounding the company continue to overhang and may prove to further hinder the group,” the analyst pointed out, as quoted by the newspaper, adding that therefore, “despite a solid performance in regard to its results, the shares are no better than a ‘hold’”.

As of 15:09 BST, Wednesday, 08 August, Glencore Xstrata PLC share price is 325.27p.

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