Higher oil volumes drive revenue rise at Glencore

published 5 March 2013

Revenue rose 15 per cent to 214bn dollars in the year ended December 31st at commodity trading giant Glencore.

This was primarily driven by higher oil volumes handled and partially offset by lower period-on-period metals prices, the group reported.

Adjusted EBIT (earnings before interest and tax) decreased by 17% to $4.5bn in 2012 compared to 2011.

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Glencore reported that this was due to lower contributions from its industrial activities which were affected by generally lower year-on-year average commodity prices for the key commodities which it and its associates produced.

Basic earnings per share fell 81% to $0.14 from $0.72 a year earlier. Total assets jumped 22% to $106bn.

The group reported having a strong balance sheet with $9.0bn of committed liquidity and continued growth of operating cash flow, up 17% to $4.1bn.

$1.7bn of impairments recordedNet other expense for 2012 was $1.2bn, compared to $511m in 2011.

Glencore reported that 2012 primarily comprised impairments of $1.7bn, $120m acquisition related expenses and $109m of expense related to phantom equity awards granted upon Glencore's listing.

It said that this was offset by a net $497m accounting gain mainly related to the revaluation of Glencore's initial 40% interest in Mutanda upon acquisition of an additional 20% interest in April 2012.

There were also $179m of positive mark to market adjustments related to certain fixed priced forward coal sales contracts in respect of Prodeco's future production.

Glencore reported that the impairment amount mainly comprised $1.2bn of previously recognised negative fair value adjustments reclassified from other comprehensive income to the statement of income in respect of Glencore's interest in UC Rusal.

CEO: 2012 - a year of significant achievementIvan Glasenberg, Chief Executive Officer of Glencore, commented: "2012 was a year of significant achievement for Glencore. Despite the challenging environment faced by the mining industry, Glencore delivered organic growth in its industrial businesses which complemented a robust performance in its marketing operations.

"In addition to our healthy financial performance, 2012 also saw some major landmarks for the company. The acquisition of Viterra transformed our agricultural business into a truly global operation. Even more significantly, we announced the merger with Xstrata which will create a group with the expertise and scale to play a leading role in meeting the world's growing demand for commodities.

"As we look ahead to 2013, we remain focused on ensuring that we maximise the potential of the expanded Glencore platform irrespective of prevailing economic conditions."

Glencore's share price was up 2.59% to 379.55p at 09:32 on Tuesday.