Company news in brief

Glencore’s net profit crashes

Miner and commodities trading giant Glencore said yesterday its net profit slumped 75% to US$4.3 billion (R81 billion) in its year to end-December as lower commodity prices negatively impacted the group's sales.

Revenue fell 15% and core profit halved to US$17 billion as the group contended with lower prices for commodities such as coal, natural gas and oil, which had surged in 2022. It also reported impairments to reflect lower prices for cobalt and zinc.

Even as the global trader of commodities suffered a steep drop in earnings, it said it would recommend a base cash distribution to shareholders of US$0.13 per share, about US$1.6 billion, to be paid in two instalments.

This is lower than the US$5.1 billion base cash distribution last year. That figure was also increased with a further US$2 billion in share buybacks and "top up" distribution from "surplus cash". This year, there is no surplus from which to pay a "top up" distribution.

In morning trade yesterday, Glencore's shares were down 6%, having now lost more than a fifth in the past year. – Fin24

Sibanye flags loss, writedowns

Multinational miner Sibanye-Stillwater warned shareholders it will fall into a basic loss in its year to end December, hit by a massive R47.45 billion in writedowns as it contends with weaker markets for metals including platinum and nickel.

The group, now valued at about R57 billion on the JSE, warned in a trading update yesterday it expects a loss per share of up to about R14 - about R40 billion - from earnings of R6.51 previously. Headline earnings are expected to slump to as low as 60c, from R6.52 previously.

In morning trade, the group's shares were down almost 4% and have fallen about 48% in the past year.

Other than gold, the group contended with lower commodity prices for its metals, announcing writedowns to assets, including its US platinum group metal (PGM) operations, its South African gold operations, its Century zinc operation in Australia and the Sandouville nickel refinery in France.

Many mining groups, notably PGM miners, had a tough 2023 as they contended with lower-than-expected Chinese economic growth, elevated inflation, and weaker-than-expected global demand for vehicles. – Fin24

Bidcorp half-year profit jumps

South Africa's Bid Corporation (Bidcorp) reported an 18.6% jump in its half-year earnings yesterday, supported by strong performance in its European business, whose revenue and trading profit scaled record levels.

The food services company, spun off from Bidvest in 2016, said headline earnings per share (HEPS) - the main profit measure in South Africa - rose to 1 152.4 cents in the six-month period ended 31 December, from 971.7 cents a year earlier.

Currency volatility also positively impacted the rand-translated HEPS, Bidcorp said.

Net revenue of R113.8 billion rose 24% despite rapidly moderating inflation and softening demand, as many customers became more price-sensitive.

The group's European operations "have had an excellent first half", increasing revenue and trading profits to record levels in a tough and erratic environment. Revenue growth was up 29% at R40.7 billion, while trading profit jumped 46.1% to R2.3 billion. – Reuters

BHP reports profit slump

Mining giant BHP reported an 86% slump in half-year net profit, hit by a writedown of its nickel assets and costs related to a 2015 Brazilian mining disaster.

Sales rose 6% to US$27.2 billion (R515 billion) in the six months to 31 December when compared to a year earlier, the Anglo-Australian firm said. But net profit slumped 86% to US$927 million in the same period as it took a hammering from exceptional items.

BHP posted losses of US$2.47 billion on writedowns of its nickel assets in Western Australia and another US$3.17 billion over the fatal collapse of the Samarco iron ore tailings dam in Brazil.

BHP said its underlying profit for the period was US$6.6 billion, however, barely changed from a year earlier.

"We've seen volatility in global commodity prices, and demand in the developed world has been softer than expected," said BHP chief executive Mike Henry. "That said, China demand is healthy despite weakness in housing, and India remains a bright spot." – Fin24/AFP

Rio Tinto profit drops 12%

Rio Tinto reported a 12% fall in annual underlying earnings yesterday, in line with forecasts, but paid a better-than-expected final dividend as it said inflation pressures were starting to recede.

Rio said its underlying earnings came in at US$11.8 billion for 2023, down from US$13.4 billion a year earlier, mostly due to lower prices for aluminium and its minerals division. That was largely in line with the LSEG consensus estimate of US$11.7 billion.

Rio declared a final dividend of 258.0 US cents per share, up from 225.0 cents per share in 2022 and ahead of the LSEG estimate of 247.0 cents per share.

Rio's net debt remained low at US$4.2 billion, which has spurred expectations that it may look to grow via acquisition.

CEO Jakob Stausholm said last August that Rio Tinto was open to small, bolt-on acquisitions to shape its portfolio including in Canadium lithium but that valuations were too high.

He stuck to that view yesterday, even following a slide in lithium prices that has hit company valuations. - Reuters


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