Strong financial results supported by solid performance in marketing.
• Adjusted EBIT $2.5 billion, a 24% reduction in H1 2012 versus H1 2011, but up 20% on H2 2011.
- Resilient performance from marketing business. Adjusted EBIT $1.12 billion, down 11% compared to $1.25 billion in H1 2011, a good performance in the current economic environment, with metals and minerals and agricultural segments performing strongly, while energy results came in below the relatively strong prior year period.
• Adjusted EBITDA $3.2billion, a 17% reduction in H1 2012 versus H1 2011, but up 22% on H2 2011; annualised H1 2012 tracking closely with 2011 full year.
- Industrial Adjusted EBITDA decreased 21% to $2.05billion in H1 2012 predominately due to lower average metals' prices,
impacting our own consolidated operations and that of our equity accounted associates.
• Performance of our directly owned industrial operations compares favourably with the sector, assisted by the ramp-up in operations in oil E&P, Kazzinc, Mutanda and our expanding coal portfolio.
• Strong cash flow generation, with funds from operations (FFO) of $1.9 billion and an Adjusted EBITDA interest cover in excess of 7 times. Annualised H1 2012 FFO is tracking 10% ahead of full year 2011, pointing to an improving credit metric trend.
• Abundant liquidity with $9.0billion of committed headroom and no material refinancings in the next 12 months. This liquidity is spread across more than 100 banks globally.
• Strong and capital efficient volume growth supported by low risk brownfield expansions. Overall, growth pipeline in our industrial operations remains on time and on budget.
- Conservatively in excess of 50% copper equivalent volume growth to 2014.
- Oil E&P and Mutanda/Kansuki copper/cobalt development projects are ahead of schedule and expectation, balancing some ramp-up delays at Katanga and Kazzinc. Prodeco expansion on track.
• Strategy of value-driven merger and acquisitions has continued: Xstrata and Viterra transactions in progress; Optimum, Mutanda, Rosh Pinah have recently completed with Vale's European manganese ferroalloys acquisition expected to close shortly.
• The Board has declared an interim dividend of $5.4c per share, an 8% increase over 2011 reflecting our confidence in the diversification of our commodity mix, the robustness of our marketing business, the visibility of the ramp-up of our brownfield industrial assets and the strength of our balance sheet.
Glencore's Chief Executive Officer, Ivan Glasenberg, commented:
"Glencore has continued to deliver strong financial results supported by a solid performance in marketing. The improvement on the second half of 2011 is particularly pleasing. This demonstrates the strength of Glencore's capital-efficient volume growth and diversified business model, underpinned by the strong relationships we have with our customers, suppliers and finance providers.
"The first half of 2012 also saw a number of material corporate transactions including the merger of equals with Xstrata. The acquisition of Viterra will transform our already strong agricultural business at a time when industry fundamentals are the most positive they have been for some time.
"Looking forward, we neither anticipate nor assume any material improvement in overall market or economic conditions in the near term. We will continue to diligently look to our own growth pipeline and end markets to maximise performance for our shareholders."