|Glencore Xstrata knocks US$7.6b off mining assets, reports US$8.9b loss
Newly merged mining giant Glencore Xstrata reported a switch into a first-half net loss of US$8.9 billion owing to merger write-downs, but signaled it would pay an interim dividend.
At the same time last year and on a comparable asset base, the business made a net profit of US$2.2 billion, the company said today.
The expected dividend was a sign of confidence in the future, the group said, forecasting bigger-than-expected economies of scale, AFP reports.
Publishing its first results since the merger, the new group took a charge of US$7.6 billion to write down goodwill, meaning intangible assets which have a lower book value than the market value when they changed hands.
The Switzerland-based group said that the write-down reflected the poor outlook for the mining industry and increased risks for big expansion projects and for the development of new sites.
But sales gained on a comparable basis by 4.0 percent to US$112 billion.
However, on a pro forma or nominal basis, sales fell by 2 percent to US$121 billion.
Glencore Xstrata's chief executive Ivan Glasenberg said the first half “has been a transformational period.’’
He underlined that the benefits and economies of the merger would be much greater than the initial forecast of US$500 million per year.
The group said that it expected to pay an interim dividend of US$0.054 per share.
It said that this was a sign of its confidence in its prospects and in the strength and flexibility of its balance sheet.
Glencore Xstrata is listed on the London Stock Exchange, where its shares were down 3.18 percent in mid-morning trading at 292.40 pence, having opened at 297 pence.
The group's stock had closed at 301.95 pence Monday.