Mining company Glencore plc suffered a $2.6 billion loss for its first six months of the year and canceled its dividend payment, it said. Glencore said the continuing international health crisis was to blame for a big fall in demand and production at its mining unit.
The London-listed multinational commodity trader and miner with headquarters in Switzerland reported $1.5 billion in revised earnings excluding interest and taxes but registered an impairment penalty of more than $3 billion.
Glencore is the first mining company to suspend its dividend. On Thursday, the group offered a not-so-rosy forecast as a result of the economic effects of the pandemic. Glencore will trim its outstanding debt after spending heavily on oil trading and cashing in on price swings.
Glencore said its total debt rose to $19.7 billion in the first half as a result of the virus.
The company's trading arm's $2 billion operating profit in the first half provided some relief.
Continuing diplomatic friction between China and Australia is ''hurting'' the company's commodity-exporting business, Glencore chief executive Ivan Glasenberg said. He hopes the two will come to terms.
Glencore's decision to scrap its dividend is upsetting considering the company did fairly well in terms of profits from its trading business, Jefferies Group LLC market strategist Christopher LaFemina said.
Glasenberg said the pandemic hadn't affected the timing of the group's succession scheme. However, he didn't provide further details.
Glencore mined more than half a billion metric tons of copper in the first six months of 2020 - down 11 percent compared with the same period last year. International mining supply is expected to fall as a result of the pandemic with new projects experiencing setbacks, the company said.
