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How Glencore's restructure is progressing at the half

With cost guidance down and asset disposals progressing well, Glencore has further reduced its year-end net debt target
August 24, 2016

There were three numbers Glencore (GLEN) wanted the market to focus on in its half-year results. The first two are closely related. Agreed asset sales of $3.9bn (£2.9bn) so far in 2016 are just shy of the full-year disposals target of at least $4bn, which was set to help reduce the onerous loan book. Progress on that front means the commodity giant thinks it can bring net debt - $23.6bn at the end of June - to as low as $16.5bn by December.

IC TIP: Hold at 183p

The third detail was half-year adjusted cash profits of $4.02bn, which despite major commodity price falls was just 13 per cent down on last year's total. This figure once again allowed Glencore to trumpet its opaque marketing segment, which boosted underlying profits by 14 per cent to $1.2bn in the period. Conveniently, this downplays the $3.1bn in depreciation and amortisation charges booked by the industrial division, which when combined with the trading business resulted in adjusted operating profits of $875m, a full 38 per cent lower than the first six months of 2015.

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