The newly forged iron ore-to-copper empire Glencore Xstrata was forced to slash the value of its assets by $8.5bn (£5.4bn) in the first set of results since the merger that created it.
The bulk of the writedown - $7.7bn - was a direct result of cutting the valuation of Xstrata's assets, seemingly undermining the rationale behind the deal. Mining production and trading companies have been badly hit by the volatile nature of the global commodities markets, which have been particularly ravaged in recent months by a slowdown in China. Metal prices fell by an average of 15 per cent in the first-half of 2013, hurting the combined group's figures yesterday.
Despite that, chief executive Ivan Glasenberg is thought to have pocketed around $59m from these first results, as he owns an 8.3 per cent stake in the company and the board paid out a dividend of 5.4 cents a share.
Xstrata was spun-out of Glencore as a collection of coal assets more than a decade ago, but proved so successful that the Glencore chief executive Ivan Glasenberg, was determined to bring it back into the fold.
The $7.7bn Xstrata assets writedown is believed to have included the Koniambo nickel operation in New Caledonia. Glencore did reduce the value of some of its own assets, including the Murrin Murrin nickel mine in Australia
However Mr Glasenberg and Steven Kalmin, the finance director, moved to down play the significance of the writedown, pointing out that it was the result of the share price on the "arbitrary" day that the long-mooted deal finally completed. Had the transaction finalised a month later, when the respective share prices were trading at different levels, Glencore would have only been paying a $2bn premium, they argued.
"Do I believe that we will get [the value of the Xstrata writedown] back over time? Yes, I do believe that and that's why we did the transaction and why I still feel comfortable with the deal," Mr Glasenberg said.
The South African billionaire added that his team had taken a "conservative approach" to valuing Xstrata's assets.Citigroup suggested Mr Glasenberg had performed a "clearing of the decks", meaning that any potential problems found within its assets were reflected in their revaluations straight away.
Analysts were also scanning for clues over who will snatch the role of Glencore Xstrata's first permanent chairman. Tony Hayward, who was in charge of BP at the time of the Gulf of Mexico disaster three years ago, currently holds the role on an interim basis. Mr Glasenberg surprisingly conceded that Mr Hayward was "of course" a candidate to take the role on a permanent basis.
Investors did find some cheer in better than expected figures for its key profit measure, which excluded the writedowns and other one-offs. Underlying profit was $6bn.
Mr Glasenberg was also upbeat about the cost savings that will come about as a result of the Xstrata deal, which had been put at $500m a year. He said that the actual savings would be "materially in excess" of that number, believed by many sector insiders to be more than $1bn.