Glencore swings to loss, will sell more assets than planned
Staff writer ▼ | March 1, 2016
Glencore swung to a net loss of nearly $5 billion last year on tumbling raw-material prices and said it will sell more assets than originally planned this year.Article continues below
The Swiss-based company, which reported a net loss of $4.96 billion compared with net profit of $2.3 billion in 2014, said on Tuesday that net debt dropped 15% to $25.9 billion at the end-December compared with a year earlier.
Management is now aiming to sell $4 billion to $5 billion in assets this year, up from a previous goal of $3 billion to $4 billion, targeting a reduction in net debt to $17 billion to $18 billion this year compared with its previous debt goal of $18 billion to $19 billion by the end of 2016. Glencore's net debt stood at $29.6 billion at June 30.
Glencore's emergency action has reflected similar drastic measures by the world's other big mining groups, including the likes of BHP Billiton PLC, Freeport McMoRan Inc., Rio Tinto PLC, and Vale SA. They have reduced or suspended dividends, scaled back capital spending, and sought buyers for noncore assets as metals and oil prices have collapsed.
Glencore Chief Executive Ivan Glasenberg said he is relatively bullish about the outlook for commodity prices after their steep recent declines considering how Glencore and other large mining groups have cut back output.
Glencore's debt-reduction plans includes the possible sale of a minority stake in its agricultural-products business in the second quarter and expectations it will receive final bids for at least one of two copper mines, Cobar in Australia and Lomas Bayas in Chile.
The world's third-largest diversified miner by market value had announced an accelerated debt-reduction plan as recently as December. ■ What to read next
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