Glencore’s Profit in First-Half More Than Halved

Glencore’s Profit in First-Half More Than Halved

Glencore's first-half profit has more than halved as the commodity trader and miner suffered from plunging commodity prices. Net income of the company excluding significant items dropped by 56% to $882m from a year earlier affected from the drop in prices of aluminum, nickel and other raw materials.

Glencore said its adjusted earnings before interest, tax, depreciation and amortization (EBITDA) was $4.6 billion. The company said last week that it would cut down its capital spending for 2015 to $6 billion from the $6.5 billion to $6.8 billion range announced in February.

On Wednesday, the company said its capital spending of next year was expected to be no more than $5 billion. The Switzerland-based Glencore said this month that it would take a $790 million charge on oil assets in Chad due to heavy fall in oil prices.

Oil prices are down because of a supply glut and both Brent and the US crude have lost more than half their value from a year ago. As per sources, Glencore makes about a quarter of its earnings from commodities trading. These commodities trading previously had allowed it to withstand the steep fall in oil and metal prices slightly better than pure play miners.

Glencore's earnings from its marketing division fell 27% to $1.2 billion, due to tough metals' trading conditions. The price of copper, Glencore's largest earner, is at six-year lows weighed down by a slowdown in China, which is one of the world's biggest consumers of metals and other raw materials.

Glencore's share price tumbled to record lows of 168.80 pence this week, less than a third of its debut price of 530 pence in 2011.

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