Glencore Follows Other Big Miners to Lower Profits

miningLondon-traded Glencore International has been making news for more than a year now for its takeover of Xstrata, a mining company of which Glencore already owns about 40%. The company is awaiting approval from Chinese regulators and now expects the deal to be done by mid-April.

In the meantime, Glencore reported preliminary results this morning for its 2012 fiscal year. Like BHP Billiton Ltd. (NYSE: BHP), Rio Tinto PLC (NYSE: RIO), Anglo American, Barrick Gold Corp. (NYSE: ABX), Kinross Gold Corp. (NYSE: KGC) and Newmont Mining Corp. (NYSE: NEM), Glencore took a big write-down on a mining property: a $1.2 billion impairment charge on a reclassification of an earlier charge for the company's investment in Russian aluminum giant Rusal. All told, Glencore wrote down $1.65 billion in impairment charges last year.

The company's commodity trading business helped offset the weakness in commodity prices, and Glencore managed to post an adjusted profit that was 25% lower than profit in 2011, but that exceeded an analysts' forecast for a drop of 37%. Operating profit in the company's trading division rose 11% and fell 27% in its industrial division.

For Glencore, only gold showed a positive commodity price change in 2012, up 6%. The largest negative changes were visited on nickel and iron ore, both down 23%. And Glencore nearly doubled its production of iron ore, while gold production fell by 1%.

Glencore's report is available here.

Shares in London are trading up about 3.1% this morning, at 381.45 pence.

Filed under: 24/7 Wall St. Wire, Commodities & Metals, Earnings, International Markets Tagged: ABX, BHP, KGC, NEM, RIO
Read Full Story


DJIA 24,083.83 59.70 0.25%
NASDAQ 7,003.74 -3.62 -0.05%
S&P 500 2,639.40 4.84 0.18%
NIKKEI 225 22,215.32 -62.80 -0.28%
HANG SENG 30,328.15 -308.09 -1.01%
DAX 12,422.30 -128.52 -1.02%
USD (per EUR) 1.22 -0.01 -0.62%
USD (per CHF) 0.98 0.00 0.50%
JPY (per USD) 109.42 0.62 0.57%
GBP (per USD) 1.39 -0.01 -0.48%

Can't get enough business news?

Sign up for Finance Report by AOL and get everything from retailer news to the latest IPOs delivered directly to your inbox daily!

Subscribe to our other newsletters

Emails may offer personalized content or ads. Learn more. You may unsubscribe any time.