Revenues fell by 2% in the first half of 2013 to $121.4bn.
The write off of Xstrata’s assets included $452m from its Murrin Murrin nickel mine and $324m due to its investment in Rusal, a Russian aluminum firm.
Overall, the mining giant was left with $8.9bn in losses, compared with Glencore’s profits of $2.28bn in the first six months of 2012. Ouch.
Timing is everything. The mining industry has been hit by falling prices, Glencore Xstrata reported a 15% fall in metal prices in the first six months of 2013, owing a lot to a drop in demand from China. Rival BHP Billiton revealed a 15% fall in second half profits this morning,down to $6.12bn, thanks to the drop.
The mining mega merger between Glencore and Xstrata was only completed in May of this year, having dragged on for over a year, making this announcement its first set of results. MT can only wonder if the hold-ups, which delayed the merger, have resulted in Glencore Xstrata completely missing the commodities bubble boat.
Despite the less-than-pleasing figures, chief executive Ivan Glasenberg has insisted the cost-savings from the deal would be even larger than the $500m it had previously predicted.
‘The first half of 2013 has been a transformational period for Glencore,’ said Glasenberg.
‘We completed the merger with Xstrata and have made excellent progress integrating the businesses. The synergies / cost savings from the merger will be materially in excess of previous guidance, based on timely preparation and decisive action.’
Even the chief execs dogged positivity couldn’t stop shares from plummeting by 3.7% to 290p this morning. Back when the merger was first suggested in February 2012 it was hoped the tie up would create some $209bn in sales. Turns out all that glitters ain’t gold.