SA Transcripts • Aug. 21, 2014
- Glencore has a fantastic company culture and its management is uniquely aligned with minority shareholders.
- The company has a very diverse asset base and diversified revenue and income streams.
- Glencore has less China-centric risks compared to its main rivals.
- Shares seem undervalued compared to peers.
Glencore Will Slide Into Wall Street Banks' Commodities Space
The Glencore-Xstrata Merger: What It Means For Investors
Aug. 20, 2014, 7:52 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) reports H1 adjusted net profit of $2.01B, up 8% Y/Y vs. a restated $1.86B in the first six months of 2013, primarily due to higher production volumes and improved market conditions in grains, copper, zinc and coal.
- The big news is the $1B share buyback, but shares are barely changed in London trading; the buyback plan is "refreshing," says Tony Robson of BMO Capital, but he says the amount is small given the $6.5B obtained from the sale of the Las Bambas copper project in Peru, suggesting the company is keeping back most of the Las Bambas cash for future acquisitions, which should add to growth.
Aug. 20, 2014, 4:10 AM
- Glencore (OTCPK:GLNCY) is launching a share buy-back program of up to $1B over the next six months, making it the first among the diversified miners to return extra cash to shareholders this year.
- The mining giant said last week that it had received $6.5B from the sale of its Peruvian copper project Las Bambas earlier this year, triggering the possibility of a special dividend for shareholders or a buy-back.
Aug. 19, 2014, 6:29 PM
- BHP Billiton's (NYSE:BHP) move to spin off a raft of assets it deems non-core - businesses that employ ~25% of the company's current workforce but deliver less than 10% of its profits - creates a new midsize metals player that could become a prime takeover target for rivals.
- WSJ mentions Glencore (OTCPK:GLCNF, OTCPK:GLNCY) as a potential suitor, and Mick Davis, the former CEO of Xstrata who left the company when it merged with Glencore, is on the lookout for acquisitions for his new investment vehicle.
- On the other hand, the new BHP entity could suffer from dis-synergies after the spinoff, potentially facing higher costs in borrowing funds and procuring supplies.
Aug. 13, 2014, 7:49 AM
- Glencore (OTCPK:GLCNF, OTCPK:GLNCY) reports H1 copper production rose 13% Y/Y to 741K tons, thanks largely to an increase in capacity at its Congolese operations and a better performance from the Collahuasi mine in Chile.
- Coal output rose 5% to 71.2M tons, with an expansion at its Australian mines mitigating some of the effects of a long strike at its Cerrejón mine in Colombia.
- However, the closure of two Canadian mines last year was partly to blame for an 11% fall in zinc production to 650K tons, and the shuttering of nickel mines in Australia and the Dominican Republic was reflected in an 8% reduction in output to 49K tons.
Jul. 31, 2014, 12:17 PM
- ArcelorMittal (MT -2.7%) and Glencore (OTCPK:GLCNF, OTCPK:GLNCY) are among potential bidders for Guinea’s Simandou project, the world’s largest untapped iron ore deposit, Bloomberg reports.
- MT has sought to expand its own iron ore business to cut reliance on mining companies for the steelmaking ingredient; it operates an iron ore mine in neighboring Liberia and is in talks with BHP about gaining a stake in the Nimba mine in Guinea.
- In April, Guinea's government revoked rights to half the Simandou project controlled by a venture between Israeli billionaire Beny Steinmetz and Brazil’s Vale, following claims of bribery and corruption.
Jun. 27, 2014, 2:39 PM
- Glencore (GLCNF, GLNCY) has told the government of Guinea that it is interested in rights to develop the northern concession of the Simandou project, one of the world's most sought-after iron ore deposits, WSJ reports.
- BHP Billiton (BHP) and Arcelor Mittal (MT) also reportedly have notified Guinea that they could be interested in taking part in a tender.
- Glencore has little exposure to iron ore, but has said it isn't seeking out the kind of long-term investment required by Simandou, which would require billions of dollars in investment before making a profit.
- Earlier this year, the government revoked the license previously held by Vale (VALE) and BSG Resources, alleging BSG obtained the rights through corruption; Simandou's southern concession is being developed by a consortium led by Rio Tinto (RIO).
Jun. 27, 2014, 8:28 AM
- Glencore (GLCNF, GLNCY) denies claims by an Australian newspaper that its coal division had paid no taxes in Australia in the past three years on income of A$15B ($14.10B).
- The Sydney Morning Herald reported that Glencore cut its tax exposure by claiming tax breaks on expensive loans that were not necessary; interest rates on the loans, extended by Glencore's associates overseas, were up to double what it would have had to pay banks.
- Glencore calls the claim that no income tax was paid over the last three years "preposterous."
Jun. 16, 2014, 2:39 PM
- Glencore (GLCNF, GLNCY) helped finance Chad's $1.3B acquisition of Chevron's (CVX) oil assets in the African country, according to a statement by Chad's government.
- A $1.25B four-year loan for Glencore, secured against future oil exports, deepens the company's position in Chad, where it last year agreed a deal to export the landlocked nation's crude.
- CVX said Friday it had sold its share of seven oil fields in Chad's southern Doba region and an export pipeline to the government; the project is operated by Exxon Mobil (XOM).
Jun. 3, 2014, 10:40 AM
- Glencore (GLCNF, GLNCY) says it is cutting ~20% of the workforce at its Rosh Pinah zinc and lead mine in Namibia to control costs.
- The Namibian operations has 600 permanent employees.
- Rosh Pinah produced ~114K metric tons of zinc concentrate and ~20.5K metric tons of lead concentrate in 2013, up 20% and 17.5% respectively from 2012.
Jun. 2, 2014, 12:36 PM
- Congo state-owned mining company Gécamines says it is shelving a plan to sell its stake in Glencore (GLCNF, GLNCY) controlled Komoto Copper valued at ~$1B.
- Gécamines last year put its 20% share of Kamoto on the block in a bid to pay down some of its debt and fund an expansion in its own copper production, but it now says it is assessing other modes of financing.
- Komoto's majority owner, Glencore's Toronto-listed unit Katanga Mining (KATFF), was one of many potential suitors invited to bid for the stake; Katanga has first right of refusal on any sale.
May. 20, 2014, 8:27 AM
- Glencore Xstrata (GLCNF, GLNCY) has cut an additional $340M in costs and has achieved total cost savings of $2.4B since last year's mega-merger that linked the commodities giant with the global miner, CEO Ivan Glasenberg says at the company's annual meeting.
- Glasenberg expects to deliver at least $2B in synergies next year as a result of the deal - 4x what it initially estimated - and plans to cut capital spending 12% by 2015.
May. 19, 2014, 4:44 AM
- Swiss voters have overwhelmingly rejected a proposal to institute a minimum wage of 22 Swiss francs ($25) an hour, which would have been the highest in the world. Over 76% of voters cast a "no" ballot.
- "It's a strong sign to Switzerland as a center of employment," Economy Minister Johann Schneider-Ammann said. "Accepting the initiative would have led to job cuts in economically weak, rural areas."
- Major corporations that could have been affected by a "Yes" vote include UBS (UBS), Credit Suisse (CS), Roche (RHHBY), Novartis (NVS), ABB (ABB), Glencore Xstrata (GLCNF) and Nestle (NSRGY).
- Switzerland's SMI index is -0.8%, while the USD-CHF is -0.1% at 0.8914 francs.
- ETFs: FXF, EWL, FSZ
May. 18, 2014, 2:29 AM
- The Swiss are going to the polls today to vote on whether to approve a minimum wage of 22 francs ($25) an hour, which would be the highest in the world.
- The measure would affect the one-in-ten workers who earn below the 4,000 francs that the initiative stipulates.
- Businesses are against the union-backed proposal, saying it would force more people into part-time jobs and increase Switzerland's 3.2% unemployment rate. Polls show 64% of voters are against the initiative.
- Still, major corporations that could be affected include UBS (UBS), Credit Suisse (CS), Roche (RHHBY), Novartis (NVS), ABB (ABB), Glencore Xstrata (GLCNF) and Nestle (NSRGY).
- The referendum is the latest nationwide ballot relating to business. In March last year, voters authorized giving shareholders more say over executive pay but rejected a measure in November to cap management salaries.
- The Swiss are also voting today over whether to spend 3.1B francs on 22 new Saab (SAABF) fighter jets.
- ETFs: FXF, EWL, FSZ
May. 14, 2014, 10:27 AM
- BHP Billiton (BHP +0.9%) says it is reviewing options for its Western Australian Nickel West business, including a potential sale of all or parts of the business analysts say could fetch $700M.
- A sale of the nickel assets would aim to capitalize on soaring prices for nickel in recent weeks, stimulated by concerns over supply constraints.
- Nomura analysts say Nickel West has been struggling given high costs and the December shutdown of a mine due to safety concerns, adding that Glencore Xstrata (GLCNF, GLNCY) could be interested.
May. 8, 2014, 4:24 AM
- As expected, Glencore Xstrata (GLCNF, GLNCY) has named former BP CEO Tony Hayward as Chairman following a year-long search for a successor to John Bond, who was ousted after the merger of Glencore and Xstrata.
- Hayward has been interim chairman of Glencore since last May; he left BP in the wake of the Deepwater Horizon oil spill in 2010.
- Hayward is CEO of London-listed Genel Energy (GEGYF), but could reportedly step down from the role after a period of transition. Genel declined to comment on the speculation.
- Glencore Xstrata's shares are +1% in London. (PR)
May. 7, 2014, 7:05 PM
- Former BP CEO Tony Hayward will be named chairman of Glencore Xstrata (GLCNF, GLNCY) following a year-long search to replace Sir John Bond, the Daily Telegraph reports.
- Hayward is likely to step down from his position as CEO of Genel Energy (GEGYF) within a year or two, the report says.
- Hayward, who was appointed interim chairman of Glencore last May, was CEO of BP from 2007-10 and left in the aftermath of the Deepwater Horizon oil spill.
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Glencore Xstrata is one of the worlds largest global diversified natural resource companies and is one of the ten biggest companies within the FTSE 100 Index. The Groups industrial and marketing activities are supported by a global network of more than 90 offices located in over 50 countries.
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