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London - Commodities trader Glencore, just a month away from completing its takeover of mining rival Xstrata, met expectations with a 25% drop in net income, as its trading division offset the impact of weak commodity prices.
Including the impact of an impairment related to a reclassification of its holding in Russian aluminium producer RUSAL, however, the net income fell 75%.
Xstrata, reporting separately from Glencore for what should be the last time before the two complete a record tie-up, was also hit by impairments which dragged its net profit almost 80% lower. Excluding that impact, it came in with a better than expected 37% drop in its bottom line.
Investors had awaited the results as an opportunity for the world's largest diversified commodities trader to detail its strategy for life after it completes the transformational takeover of Xstrata - from target assets to additional synergies. But Glencore, still awaiting Chinese regulatory approval for its long-planned merger, left investors guessing for now, with little new information.
Glencore posted a 25% drop in net income excluding significant items to $3.06bn, in line with a consensus forecast of $3bn.
Its adjusted operating profit, or earnings before interest and tax (EBIT), dropped 17%, with a 27% drop in the industrial division accounting for the bulk of the weakness as lower production added to industry-wide issues. Its trading division saw operating profit rise 11%.
