GLNCY Glencore Plc (PK)

LONDON-- Glencore PLC has swung to a first half-year net loss and warned of less buoyant marketing earnings this year, showing how sharp falls in raw-material prices have tested the group's hybrid mining and commodities-trading business model.

The world's third largest globally diversified miner by market capitalization on Wednesday reported a net loss of $676 million in the six months to end-June--missing analysts' expectations for a net profit of around $728 million--compared with net profit of $1.72 billion in the same period last year.

Glencore took $1.6 billion in net exceptional charges, including $792 million related to the write-down of its Chad oil assets and $377 million on largely currency-related income-tax expenses.

Revenue fell 25% to $85.71 billion. Gross debt fell to $50.48 billion at June 30 from $52.69 billion at the end of 2014.

Glencore took a hit in its mining business, largely because of weaker commodity prices, particularly copper, coal and oil which are trading near multiyear lows. Earnings before interest, taxes and exceptional from its industrial activities, which includes mines and farms, fell 84% to $341 million in the first half of the year from the same period a year before.

Glencore's reversal in fortune comes as the company's stock price has swooned amid the global commodities-price rout that pushed oil, copper and a host of other resources to multiyear lows, battering results from mining companies.

Even with a diverse set of assets across the metals spectrum, and a powerful trading arm, the world's third-largest publicly traded mining company by market value, has lagged behind its other big peers as investors have weighed its large debt.

The company's trading division reported a 29% drop in first-half adjusted Ebit to $1.1 billion over the same period. This compares with Deutsche Bank's $1.2 billion estimate.

The company lowered its forecast for full-year EBIT from its trading division to a range of $2.5 billion to $2.6 billion. Glencore's Chief Executive Ivan Glasenberg had said as recently as in March that the division would generate between $2.7 billion and $3.7 billion "no matter what commodity prices are doing."

Nevertheless, the company declared an interim dividend of $0.06 a share, in line with last year's interim dividend.

Write to Alex MacDonald at alex.macdonald@wsj.com

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(END) Dow Jones Newswires

August 19, 2015 03:35 ET (07:35 GMT)

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