Glencore's "strong" trading helps offset mine setbacks

Thu Nov 1, 2012 6:30am EDT
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By Clara Ferreira-Marques

LONDON (Reuters) - Glencore (GLEN.L: Quote) said its closely watched trading operations performed "strongly" in the third quarter, against a more uneven picture for its mines, where strikes and Congo power cuts dampened growth.

Glencore, in the throes of a $33 billion takeover of miner Xstrata XTA.L, said in a trading update that its overall performance was "good" in the three months to the end of September, despite weaker commodity prices and tough global economic conditions it said would not improve any time soon.

"(The third quarter) saw a healthy improvement," Glencore said of its marketing - or trading - operations, which accounted for just over a third of profit last year, but are seen as a bellwether and less easily forecast by the market than the industrial arm, made up of mines, farms and oil fields.

"Glencore's outlook for the remainder of the year in marketing remains positive."

Glencore's industrial operations provide the larger share of profit and volume growth was more uneven. The most significant improvements were in its nascent oil division, gold and coal - the latter boosted by acquisitions over the past year which helped offset the impact of strikes in Colombia.

Analysts said the numbers and positive commentary on marketing were broadly in line with expectations, lifting shares in Glencore just 0.5 percent at 0920 GMT, marginally outperforming a flat UK mining sector .


Among trouble spots in Glencore's industrial arm was the Katanga operation in the Democratic Republic of Congo, hit by power outages which cost the group 49 days of production over the first nine months of the year.   Continued...

The logo of Glencore is seen in front of the company's headquarters in the Swiss town of Baar September 7, 2012. REUTERS/Michael Buholzer