LONDON -- Commodities titan Glencore International PLC (GLEN.LN)
reported lower 2012 earnings Tuesday as its industrial activities
slackened, more than offsetting a better performance by its
marketing activities.
The Baar, Switzerland-based miner also extended the deadline for
completing its merger with Anglo-Swiss miner Xstrata PLC (XTA.LN)
to April 16 from March 15, the second extension so far this year as
it waits to secure its last regulatory approval from China's
ministry of commerce, or MOFCOM. Glencore and Xstrata already have
regulatory approval from the European Union and South Africa
although they had to make concessions in order to secure these
approvals. The merger will create a mining juggernaut with a market
capitalization of over $70 billion.
It also raised its full-year dividend by 5% to $ 0.1575 per
share.
"Despite the challenging environment faced by the mining
industry, Glencore delivered organic growth in its industrial
businesses which complemented a robust performance in its marketing
operations," said Glencore's Chief Executive Ivan Glasenberg.
"Looking foward...we continue to see a healthy long term outlook
for our commodities based on the continuing growth within emerging
market economies and sustained levels of consumption within
developed markets," he added.
Glencore said that net profit attributable to shareholders fell
75% to $1.0 billion for the 12 months ending Dec 31, 2012 as
revenue rose 15% to $214.44 billion but adjusted ebit or earnings
before interest and taxes dropped 17% to $4.47 billion. Adjusted
Ebit beat analysts' average expectations of $4.4 billion according
to a company poll of 12 analysts.
Adjusted ebit from marketing activities, which accounted for 48%
of the total, rose 11% to $2.13 billion due to improved performance
in agricultural trading after cotton trading losses weighed on
profitability in 2011. Higher profitability in agriculture and
metals and minerals more than offset lower profitability in energy
marketing.
Meanwhile adjusted ebit from industrial activities, which
accounted for 52% of the total and includes mining, refining and
smelting, fell 33% to $2.34 billion due to lower metal prices with
nickel, coal, zinc and copper, down 23%, 24%, 11% and 10%
respectively.
Glencore's shares have fallen 30% since its initial public
offering price of 530 pence a share in May 2011 as concerns about
the global economy dented the valuation of mining equities in
general.
Glencore listed its shares in May on London and Hong Kong to
much fanfare in what was considered a stepping stone to a tie-up
with globally diversified miner Xstrata, a miner with which it has
historically close commercial ties and in which it owns a 34%
stake.
Glencore shares closed Monday down 1.9% at 3.77 pence a share
but are up 5.3% since the beginning of the year.
-Write to Alex MacDonald at alex.macdonald@dowjones.com
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