Glencore's big write-down

The write-down was larger than most investors had expected, with $7.7bn of goodwill relating to mining assets wiped off the books, chiefly as a result of lower commodity prices. The group also recorded a $1.1bn accounting loss from having to revalue the 34 per cent stake in Xstrata it already owned prior to the merger.

The bad news was tempered slightly by chief executive Ivan Glasenberg's announcement that synergies from the merger are now expected to generate over $1bn in cost savings, at least twice the level previously guided to. Nevertheless, analysts from broker SP Angel expect "further impairment for the full year as an inevitability" - although hopefully to a much smaller extent.

The write-downs also masked a decent operational performance for the group in light of the difficult pricing environment. Adjusted cash profits were slightly ahead of consensus expectations at $6bn on a pro-forma basis, compared with $6.6bn in the same period last year. Net income on a pro-forma basis, after stripping out impairments and other exceptional items, fell 39 per cent to $2bn, but was also ahead of expectations.

Deutsche Bank forecasts normalised EPS of 25¢ in the current year, rising to 36¢ in 2014 (7¢ in 2012).