Commodities prices boost Glencore's first-half profit

26th August 2010, Comments 0 comments

Global commodities giant Glencore said on Thursday that its net profit over the first half of the year had grown by 42 percent, driven by higher prices and the gradual economic recovery.

Net profit for the period reached 1.56 billion dollars (1.23 billion euros), compared to 1.10 billion in the same period of 2009, the company said in a statement.

"Compared to the first half of 2009, profitability from Glencore's industrial activities increased more than threefold primarily due to significantly higher metal prices," it added.

Founded in 1974 as a trading group, Glencore now covers the whole range of natural resources from metals and minerals to oil through coal to agricultural commodities, and also controls mining, smelting, refining and processing plants.

First half revenues grew by 55 percent to 70 billion dollars.

The group headquartered in eastern Switzerland, which has has completed several major acquisitions over the first six months of the year, nonetheless said that its liquidity reserves stood at 6.5 billion dollars on 30 June 2010, more than twice its internal minimum target.

Glencore completed the repurchase of the Colombian Prodeco coal mining business from Xstrata in March for 2.25 billion dollars and said the deal would partly be funded by at least one billion dollars in asset disposals over the coming months.

The company said Thursday that it had since reached an agreement on the sale of "certain non-core portfolio assets" for an expected 400 million dollars, with the balance coming from the planned partial spin-off of its Kazakh gold unit during 2011.

Glencore's net debt increased to 13.6 billion dollars from 10.2 billion dollars.

In March, Glencore reported a 44 percent drop in annual net profit in 2009 last year to 2.72 billion dollars, and warned of volatile commodity markets.

© 2010 AFP

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