MW:Energy and Agriculture drive Glencore International growth
StockMarketWire.com - Swiss-based commodities producer and marketer Glencore International in its first trading statement since the recent IPO said revenues were $44.2bn over the first quarter, up 39% compared to the first quarter of 2010.
Adjusted EBITDA was $2bn, up 46% compared to the first quarter 2010 and adjusted EBIT was $1.8bn, up 45%.
Glencore net income was $1.3bn, up 47% compared to the prior year period.
Cash generated by operating activities before working capital for the first quarter was $1.5bn, up 47%.
Funds from operations for the first quarter were $1.1bn, up 42%.
Over the first quarter of 2011, Glencore said its marketing operations in many commodities benefitted from healthy global demand and trade flows, as well as the additional arbitrage opportunities brought on by increased market volatility and tighter supply conditions.
In particular, the oil division reported substantially improved results following a challenging 2010, allowing the Energy Products' segment to even improve on 2009's average quarterly performance. Both grain and oil sales volumes were meaningfully ahead of the comparable quarter in 2010, while contributions for the Energy and Agricultural Products' segments increased by 140% and 105% respectively.
The Metals and Minerals segment was 20% lower, following a particularly strong first quarter of 2010. First quarter overall marketing adjusted EBIT was $675m, up 37% compared to the first quarter 2010.
Glencore's consolidated Industrial Activities and its associates delivered substantially improved performance during the first quarter 2011. Adjusted EBIT contributions from Industrial Activities were $ 1.1 billion, up 50% compared to the first quarter 2010. This performance was driven by the stronger commodity price environment, as well as operational enhancements and production increases at many operations. For example, compared to the first quarter 2010, Katanga's copper production increased by 50%, Prodeco's coal production by 33% and Kazzinc's gold production by 87%.
Glencore said it remains well positioned for 2011. Despite the recent commodity price volatility, the Directors believe that underlying fundamentals across many of our key commodities are supportive and that economic activity and demand for commodities remains healthy. In addition, Glencore continues to focus on the many production expansion projects underway across its industrial asset portfolio. These are expected to result in increased production capacity for the balance of 2011 and beyond, and the transform-ation to and establishment of many high-quality, large-scale, long-life and low cost positioned assets. As previously guided, the Directors intend to declare an interim dividend of $350m concurrent with the publication of the interim results for the six months ended 30th June 2011.
CEO, Ivan Glasenberg, commented: 'The IPO saw considerable support from equity investors for Glencore's business model, strategy and ability to deliver superior returns over the long term. Our first quarter results show that Glencore continues to deliver a strong return on equity, emphasising the unique benefits of having large scale marketing and industrial asset activities spread across a diversified commodity base.'
