SINGAPORE Glencore Xstrata Plc posted a 9-percent year-on-year fall in underlying earnings in the first half of the year even as its marketing arm reported a solid performance, the merged entity said.
The Baar, Switzerland-based company recorded a goodwill impairment of $7.6 billion in relation to the Xstrata acquisition, reflecting the broader negative mining industry environment and the heightened risks associated with greenfield and large-scale expansion projects.
The mining company expects cash savings to materially exceed the previous guidance of $500 million per annum.
The companys underlying earnings for the six months ended June 30 stood at $6 billion, compared with adjusted pro forma earnings before interest, taxes, depreciation and amortization (Ebitda) of $6.6 billion in the same period last year. Marketing operations contributed $1.2 billion of earnings before interest and taxes (Ebit), a 6-percent increase year on year.
The metals and minerals divisions underlying earnings fell 4 percent year on year in the first half thanks to weak commodities prices, although production growth at African copper mines and Perus Antapaccay mine offset the weak prices, the company said.
A version of this article was first published in AMM sister publication Metal Bulletin.