Home > Financial reports > Glencore to stop reporting quarterly results

Glencore to stop reporting quarterly results

July 21, 2011

“Glencore has decided to stop reporting its results every quarter, in a move that is likely to soothe tensions with Xstrata, the mining company in which it owns a 34 per cent stake. The commodities trader, which raised $10bn in May in one of Europe’s largest ever initial public offerings, on Thursday offered to pay up to $2.4m to persuade bondholders to approve a change in the conditions of one of its bonds, which would allow it to drop the requirement for quarterly reporting.

Glencore was alone among major London-listed mining companies when it reported first-quarter results last month. BHP Billiton, Rio Tinto, Anglo American and Xstrata all report results only twice a year. ‘Information is not free,’ said Henri Alexaline, credit analyst at BNP Paribas. ‘If there’s one company that understands that, it’s Glencore. In Q1 they gave away free information relative to their peers.’”

Source: Financial Times, July 14 2011

Observations:

  • The major mining houses provide financial reports twice a year and quarterly production reports. BHP Billiton is running out of sync with the others with a fiscal year that ends in June instead of in December.
  • Analysts are using Glencore’s quarterly reports to analyze Xstrata’s quarterly performance, although Xstrata denies to have provided financial information to Glencore since its IPO. Glencore owns 33% of Xstrata’s shares.

Implications:

  • The targeted change of reporting structure would not only save Glencore costs, but could also be interpreted as a step to align with Xstrata’s procedures in order to make a merger of the two companies smoother.
  • The relatively low market valuation of Glencore since the IPO could speed up the merger process, as it would leave Xstrata’s potentially reluctant other shareholders with a larger part of the new company.

©2011 | Wilfred Visser | thebusinessofmining.com

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