Miner and commodities trader Glencore (LON:GLEN) reported Thursday a drop in output for most of the commodities it mines and sells, on the back of ongoing asset disposals, cutbacks at its operations, and bad weather.
Glencore now expects slightly better earning before interest for the year - $2.5 billion to $2.7 billion, versus the $2.4 billion to $2.7 billion previously estimated.While production of copper, zinc, oil and coal in the third quarter was lower than in the same period last year (down 6%, 30%, 25% and 11% respectively), the company noted it was "in line with expectations." following announced supply reductions.
Nickel was Glencore's only saving grace - output increased by 20% in the period when compared to the third quarter of 2015, thanks to major improvements at its smelter at Sudbury, Canada, it said.
Without giving a reason for it, the Swiss firm said it now expects slightly better earning before interest for the year - $2.5 billion to $2.7 billion, versus the $2.4 billion to $2.7 billion previously estimated.
Analysts believe the improved outlook reflected better trading conditions within the coal division as well as the result of its ongoing assets sales. Credit Suisse told Reuters that coal was "a key sensitivity" for Glencore, as a $10 per tonne price move can translate into a more than $1 billion impact on core earnings.
Glencore, which along with Anglo American (LON:AAL) was one the companies worst affected by a commodity price rout, has been working on reducing debt after investors raised concerns last year that its borrowings were extremely high, at $30 billion.
As part of those measures, Glencore decided to suspend its dividend and sell $2.5 billion of new shares and it is now the second-best performer in the UK's benchmark stock index.