TIDMGLEN
RNS Number : 4234W
Glencore PLC
19 August 2015
Baar, Switzerland
19 August 2015
2015 Half-Year Report
Highlights
US$ million H1 H1 Change 2014
2015 2014 %
------------------------------------- ------ ------ ------- -------
Key statement of income
and cash flows highlights(1)
:
Adjusted EBITDA(2) 4,611 6,464 (29) 12,764
Adjusted EBIT(2) 1,412 3,624 (61) 6,706
Net income attributable to equity
holders pre-significant items(3) 882 2,010 (56) 4,285
Earnings per share (pre-significant
items) (Basic) (US$) 0.07 0.15 (53) 0.33
Net (loss)/income attributable
to equity holders (676) 1,720 (139) 2,308
Funds from operations (FFO)(4,5) 3,487 4,909 (29) 10,169
Capital expenditure (excluding
Las Bambas of $798 million in
H1 2014 and $961 million in
full year 2014 respectively) 3,189 4,027 (21) 8,566
-------------------------------------- ------ ------ ------- -------
US$ million 30.06.2015 31.12.2014 Change %
------------------------------------ ----------- ----------- ---------
Key financial position highlights:
Total assets 148,074 152,205 (3)
Current capital employed (CCE)(5) 17,163 21,277 (19)
Net debt 29,550 30,532 (3)
Ratios:
FFO to Net debt(4,6) 29.6% 33.3% (11)
Net debt to Adjusted EBITDA(6) 2.71x 2.39x 13
Adjusted EBITDA to net interest(6) 8.01x 8.68x (8)
Adjusted current ratio(5) 1.14x 1.23x (7)
------------------------------------- ----------- ----------- ---------
1 Refer to basis of preparation on page 5.
2 Refer to note 3 of the interim financial statements for
definition and reconciliation of Adjusted EBIT/EBITDA.
3 Refer to significant items table on page 6.
4 Refer to page 8.
5 Refer to glossary for definition.
6 H1 2015 ratio based on last 12 months' FFO and Adjusted
EBITDA.
-- Adjusted EBITDA of $4.6 billion, down 29% compared to H1 2014
owing to substantially weaker commodity prices:
- Marketing Adjusted EBITDA down 27% to $1.2 billion and
Adjusted EBIT down 29% to $1.1 billion, with tough metals' trading
conditions, particularly aluminium and nickel affected by the
collapse in physical premiums and subdued levels of global
stainless steel production. We expect better second half
contributions from metals and agriculture to underpin full year
Marketing EBIT guidance of $2.5-$2.6 billion.
- Industrial Adjusted EBITDA down 29% to $3.4 billion, due to
the substantially weaker net commodity price / exchange rate
environment. Despite the weaker price environment, Metals and
minerals' Adjusted EBITDA mining margin was still a healthy 24%
compared to 30% in 2014 and Energy Adjusted EBITDA margin was 28%
compared to 29%, reflecting the quality of our asset portfolio.
-- H1 2015 production included:
- Period-on-period growth from African copper, albeit overall
copper production was down 3% to 730,900 tonnes reflecting
anticipated grade changes at Alumbrera and Antamina and planned
maintenance activities at Collahuasi.
- Zinc production up 12% to 730,300 tonnes, mainly due to the
ramp-up of the expansion projects in Australia.
- Coal production down 4% to 68.7 million tonnes, primarily due
to the market driven decision to cut production.
-- The sharp decline in oil prices in late 2014, which continued
into 2015, led to significant amendments to the work programme at
our assets in Chad, including changes to capex and production
profiles and the number of drilling rigs in operation. As a result,
the carrying value of these fields/blocks has been impaired by $792
million.
-- Unfortunately, Optimum Coal has commenced business rescue
proceedings given the continued and unsustainable financial
hardship as a result of its agreement with Eskom. The directors of
Optimum are of the view that if the supply agreement with Eskom can
be renegotiated, there is a reasonable prospect of rescuing
Optimum.
-- FFO was $3.5 billion, down 29% compared to H1 2014 as a
result of the weaker price environment noted above.
-- Net debt decreased by $982 million to $29.6 billion,
reflecting a 21% reduction in net capital expenditure (excluding
Las Bambas) and a release of non-RMI working capital of $3.2
billion, due naturally to lower commodity prices and some
additional proactive working capital management to ensure a more
efficient balance sheet.
-- Strong and flexible balance sheet, with $10.5 billion of
committed available liquidity at period end.
-- Capital management:
- During the period, $240 million of own shares were acquired
under the previously announced $1.0 billion share buyback
programme, completing this initiative.
- In June, the distribution of the investment in Lonmin plc was completed.
- The Board has declared an interim distribution of $6 cents per
share, consistent with the 2014 interim distribution, reflecting
our confidence in the prospects and strength of our underlying
operations, commodities mix and sustainable cashflow profile.
-- Ongoing portfolio management reflects:
- August completion of the sales of Glencore's interest in the
Tampakan copper project, the Falcondo nickel operations and the
Sipilou nickel project, for total proceeds of approximately $290
million.
-- Full year production guidance is provided in the Appendix on page 82.
-- The target industrial capex ceiling for full year 2015 is now
$6 billion, compared to the range of $6.5-6.8 billion previously
communicated. We currently anticipate that industrial capex for
2016 will be no more than $5.0 billion.
Glencore's Chief Executive Officer, Ivan Glasenberg,
commented:
"Against a challenging backdrop for many of our commodities, we
have taken a range of pre-emptive actions in respect of our balance
sheet, operations and capital spending/recycling in order to
preserve our current credit rating and sustain our track record on
equity distributions.
Our core industrial assets remain well positioned on their
respective cost curves. We remain by far the most diversified
commodity producer and marketer and are well positioned to benefit
from any improvement in pricing when it finally and inevitably
materialises. Our principal objective remains to grow our free cash
flow per share and return any excess capital in the most
sustainable and efficient manner."
To view the full report please click here:
http://www.glencore.com/assets/investors/doc/reports_and_results/2015/GLEN-Half-Year-Report-2015.pdf
For further information please contact:
Investors
Paul Smith t: +41 41 m: +41 79 paul.smith@glencore.com
709 24 87 947 13 48
Martin Fewings t: +41 41 m: +41 79 martin.fewings@glencore.com
709 28 80 737 56 42
Elisa Morniroli t: +41 41 m: +41 79 elisa.morniroli@glencore.com
709 28 18 833 05 08
Media
Charles t: +41 41 m: +41 79 charles.watenphul@glencore.com
Watenphul 709 24 62 904 33 20
Pam Bell t: +44 20 m: +44 77 pam.bell@glencore.co.uk
7412 3471 9962 6715
www.glencore.com
Glencore is one of the world's largest global diversified
natural resource companies and a major producer and marketer of
more than 90 commodities. The Group's operations comprise of over
150 mining and metallurgical sites, oil production assets and
agricultural facilities.
With a strong footprint in both established and emerging regions
for natural resources, Glencore's industrial and marketing
activities are supported by a global network of more than 90
offices located in over 50 countries.
Glencore's customers are industrial consumers, such as those in
the automotive, steel, power generation, oil and food processing.
We also provide financing, logistics and other services to
producers and consumers of commodities. Glencore's companies employ
around 181,000 people, including contractors.
Glencore is proud to be a member of the Voluntary Principles on
Security and Human Rights and the International Council on Mining
and Metals. We are an active participant in the Extractive
Industries Transparency Initiative.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR SFSFAAFISEEA
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