Glencore has fallen to an $8 billion full-year pre-tax loss after impairments and restructuring costs as the commodities trader and miner acted to cut its debts to cope with weaker commodity prices.
Impairments rose to $7 billion (£5 billion) at the company, which was under threat in the autumn when its shares lost a third of their value in one day. This included a $4 billion write down on its Koniambo nickel operations in New Caledonia. The price of nickel has fallen by 60 per cent since 2014.
Shares in Glencore were down 2 per cent to 130½p in late morning trading.
In December the company was forced by investors to cut its $30 billion debt — one of the highest in the sector — by $10 billion. Glencore acted fast, including putting a coalmine in South Africa into administration, pausing operations in the copperbelt in Zambia and the Democratic Republic of Congo, and mortgaging off some of its precious metals production from a couple of big copper mines.
The company today reported a 15 per cent reduction in net debt to $25.9 billion and said it could achieve a further $4 billion to $5 billion of asset disposals in 2016, on top of the $1.6 billion of deals already agreed.
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Ivan Glasenberg , the Glencore chief executive, said: “Our rigorous focus on debt reduction, supply discipline and cost efficiencies enabled Glencore to record a robust performance in difficult market conditions.”
Financial markets dropped last year as concern rose over global growth, particularly in China. A slowdown in the second largest economy hit the commodity sector, which was further affected by oil prices and a strong dollar.
Earnings before interest, depreciation and amortisation — the measure preferred by analysts — dropped 32 per cent to $8.694, close to consensus forecasts of $8.689 billion.
Profit before interest and tax at its trading arm fell 11 per cent to $2.7 billion, above market expectations of $2.48 billion and profits from its mining and industrial business slid 38 per cent to $6 billion.
Overall, pre-tax profits fell from $4.25 billion in 2014 to a loss of $8.02 billion in the year to the end of December. Allowing for the losses attributable to minority partners, it lost $5.1 billion against a profit last year of $4 billion.