Glencore sees shares tumble on first results
GLENCORE’s maiden results as a listed firm disappointed markets, just three weeks after its $60bn (£36.6bn) float, with its trading arm delivering profits some 20 per cent below forecasts.
The trader’s shares tumbled 4.47 per cent, sent down further by chief executive Ivan Glasenberg’s statement that “there has been no firm discussion” of a merger with Xstrata, rumours of which had sent the share price up by 3.3 per cent the previous day.
But analysts were overall adopting a “wait and see” attitude, with several saying that they would need to see several quarters of post-IPO results before they could become sufficiently familiar with Glencore’s business model.
The company, known for its secrecy in the past, revealed that during the first quarter of 2011 it made $1.01bn, or 61 per cent of its earnings before interest and taxes (EBIT), in its industrial division, which consists of Glencore’s global network of mining assets.
But it was the marketing division that missed expectations, bringing in an EBIT of $675m in the quarter.
That was still 37 per cent up on last year’s earnings but the metals and mining division saw profits fall by a fifth, with the company saying that the “particularly strong first quarter of 2010” was unflattering to the numbers. Earnings from trading in its energy division soared by 240 per cent, however, due to fluctuating oil prices.
TIME LINE | HISTORY OF GLENCORE
1974: Glencore is established after a management buyout of Marc Rich & Co, its predecessor, to trade metals, minerals and oil.
1987: Glencore’s first acquisition of a commodities asset, with the purchase of an American smelter and a mine in Peru.
1990; Acquisition of a stake in Xstrata.
1993/1994: Management buyout and renaming as Glencore International
1997: Purchase of Prodeco coal development project in Colombia.
2000: Acquisition of a majority stake in Kazzinc.
2002: Sale of the Australian and South African coal assets to Xstrata as well as its listing in London.
2007: Merger of some Glencore assets with Rusal, in which Glencore has majority stake.
2011: Glencore floats simultaneously in London and Hong Kong, raising $11bn at a valuation of some $60bn.
June 2011: Glencore’s maiden results.