Glencore profits drive hunt for more acquisitions
Friday 26 August 2011
Glencore yesterday said it was looking for more acquisitions after the giant commodities trader unveiled first-half profit up 50 per cent in its first set of results since its huge flotation.
The world's biggest commodities trader forecast continued strong demand from Asia and said recent market turmoil presented it with a range of buying opportunities.
The company's shares gained more than 6 per cent in early trading but closed down 0.3 per cent, leaving investors 26 per cent out of pocket from May's world record initial public offering at 530p a share. The shares have been battered in recent market turmoil.
Ivan Glasenberg, the chief executive, said falling valuations gave Glencore the chance to use its cash to buy up publicly traded companies and private businesses.
He said: "We are an opportunistic company [and] we are in a fortunate position in that now we have the robust balance sheet to look at assets more aggressively. Companies are a lot cheaper. It's definitely, we believe, a very opportune time."
The company owns mines and plants as well as trading operations and launched on Wednesday a A$268m (£172m) bid for full control of Minara Resources, the Australian nickel miner in which it already owns a 73 per cent stake.
Glencore is set to complete its £295m purchase of 70 per cent of the Peruvian Mina Justa copper mining project in October.
The Swiss-based company also owns 34 per cent of Xstrata, the London-listed miner, and Mr Glasenberg has said he would like to combine the two companies.
Glencore's adjusted earnings before interest and tax rose by half to $3.3bn (£2bn) in the first six months of the year on strong demand from developing Asian markets.
Urbanisation and industrialisation in those markets, led by China and India, have sent the price of commodities such as oil, metals and food products to record highs but the weakening global economy has raised concerns that prices could fall.
Infrastructure improvements and the drive for higher living standards in Asia will continue to underpin global trade and demand for commodities, Mr Glasenberg predicted.
Mr Glasenberg said: "We still see demand very strong in Asia. The Chinese see this as a buying opportunity and we see increased purchasing in Asia."
His upbeat outlook echoed comments from BHP Billiton on Wednesday. The world's biggest miner said it expected "robust demand" for commodities in the short and medium term.
The company proposed a first interim dividend of 5p a share. Glencore shares closed at 388.5p.
Sales of the tablet are set to fall again, say analysts
World's most lethal spider found under a bunch of bananas
I Am Bread could actually be a challenging and nuanced title
Company decides to go for simply scary after criticising other sites for 'creepy and targeted' advertising
Footage shot by a passerby shows moment an ill man was carried out of his burning home
Peter Biaksangzuala died from his injuries in hospital on Sunday
- 1 Jack the Ripper: Scientist who claims to have identified notorious killer has 'made serious DNA error'
- 2 Ebola outbreak: What is bushmeat – and is it to blame for the disease that has killed thousands?
- 3 Star Wars memorabilia called a 'bit of plastic' on Antiques Roadshow by Fiona Bruce valued at £50,000
- 4 Meet Thea, Norway's 12-year-old child bride
- 5 Russell Brand might seem like a sexy revolutionary worth getting behind, but he will only fail his fans
Kobani: Fifteen-year-old boy taken captive with suspected jihadist 'shot in the head by militant group' fighting against Isis
Ebola outbreak: What is bushmeat – and is it to blame for the disease that has killed thousands?
Isis fighters 'crucify' 17-year-old boy in Syria
Oscar Pistorius sentencing: Olympic star must serve 10 years, prosecutor urges
Kentucky gang rape: 15-year-old boy left in critical condition after sexual attack by group at party
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Sorry Judy Finnigan – Ched Evans is no less sickening than an alleyway rapist
Residents should throw a street party and mix with immigrant neighbours, councils told
Workers 'could be forced to pay £5 a week' to get benefits
Russell Brand threatened with arrest after filming outside Fox News headquarters
Amal Alamuddin calls for the return of the Elgin Marbles from Britain: 'Injustice has persisted for too long'
iJobs Money & Business
£18 - 23k + Benefits: Guru Careers: We are seeking a Customer Service Executiv...
£60 - 65k + Benefits: Guru Careers: We are seeking a ASP.NET Web Developer / ....
£60,000 - £80,000: Saxton Leigh: Our client is an leading Asset Manager based...
£27000 - £32000 Per Annum: Clearwater People Solutions Ltd: Our large charity ...