With its merger with Xstrata (XTA) nearing completion, Glencore (GLEN) revealed full-year results in line with forecasts as an 11 per cent rise in adjusted cash profits from its marketing activities partially offset the aggregate effect of 10-20 per cent falls in commodity prices through 2012.
Marketing volumes were up by a fifth in Glencore's nickel and copper segments, while traded iron ore increased by 92 per cent. The volume of silver traded doubled through 2012, but poor trading conditions in oil and coal hit the performance within the Energy division. Significantly, Glencore's agricultural activities moved into the black reporting a $361m (£239m) profit against a $47m loss in 2011. Glencore is determined to expand this side of its business and at the year-end it finalised a $6.1bn acquisition of Canadian grain handler Viterra.
Overall, Glencore reported an 8 per cent contraction in adjusted cash profits to $5.94bn, with the decline chiefly attributable to a one-third fall in profits linked to the group's industrial activities. Full-year earnings were held in check by $1.65bn in impairment charges mainly linked to fair value adjustments for Glencore's interest in UC Rusal, along with with its share of Xstrata's exceptional items of $875m - small beer compared with those of other sector heavyweights such as Rio Tinto (RIO) and BHP Billiton (BLT).
Prior to these results BoA/Merrill Lynch arrived at 2013 EPS of 55¢ for the merged entity.
| GLENCORE (GLEN) | ||||
|---|---|---|---|---|
| ORD PRICE: | 376p | MARKET VALUE: | £27bn | |
| TOUCH: | 375-376p | 12-MONTH HIGH: | 440p | LOW: 289p |
| DIVIDEND YIELD: | 2.8% | PE RATIO: | 41 | |
| NET ASSET VALUE: | 440¢ | NET DEBT: | 45% | |
| Year to 31 Dec | Turnover ($bn) | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|---|
| 2010 | 145 | 4.34 | 35 | nil |
| 2011 | 186 | 4.00 | 72 | 15 |
| 2012 | 214 | 1.08 | 14 | 15.75 |
| % change | +15 | -73 | -81 | +5 |
Ex-div: 22 May Payment: 7 Jun £1=$1.51 | ||||
