Glencore Swung to Loss on $3.2 Billion Impairments, Scraps 2020 Dividend -- Update
06 August 2020 - 6:25PM
Dow Jones News
--Glencore posted a $2.6 billion net loss, as it booked
significant impairments to reflect lower commodity prices.
--Adjusted earnings fell to $4.83 billion but beat market
consensus.
--The miner said it wouldn't paid dividends for 2020.
By Jaime Llinares Taboada
Glencore PLC swung to a loss for the first half of the year on a
worse underlying performance and significant impairments, and
scrapped its dividend payments for 2020.
The FTSE 100 miner on Thursday posted a net loss of $2.6 billion
for the six months ended June 30 compared with a $226 million
profit a year earlier. This was driven by impairments of $3.2
billion as a result of lower commodity prices related to the
uncertainty arising from the coronavirus pandemic.
Adjusted earnings before interest, taxes, depreciation and
amortization fell to $4.83 billion from $5.58 billion. However,
this was above the market consensus of $4.29 billion--taken from
the company's website and based on 14 forecasts.
Chief Executive Ivan Glasenberg said the performance reflected
the countercyclical earnings power from Glencore's large-scale
marketing activities. "Marketing delivered a half-yearly record
adjusted EBI performance of $2.0 billion, allowing us to raise
full-year guidance to the top end of our long-term $2.2
[billion]-$3.2 billion range," he said.
However, Glencore said that its outlook remains uncertain and it
wouldn't pay dividends for the current year.
"Notwithstanding our cash-generative business and secure
liquidity positions, the board has concluded that it would be
inappropriate to make a distribution to shareholders in 2020,
instead prioritizing the acceleration of net debt reduction to
within our target range (<$16 billion), currently expected to
occur by the end of 2020."
Shares at 0745 GMT were down 6.06 pence, or 3.1%, at 190.14
pence.
Write to Jaime Llinares Taboada at jaime.llinares@wsj.com;
@JaimeLlinaresT
(END) Dow Jones Newswires
August 06, 2020 04:10 ET (08:10 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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