Swiss-based commodities company Glencore reported good performance in its third quarter on Thursday, but also expressed uncertainty on the global macro conditions in near future.
“Overall performance in (the third quarter) was good, despite generally weaker commodity prices,” the company stated.
Even though no records have been published by Glencore that show its performance in the third quarter, the company emphasized that it had experienced steady growth – especially in metals and agricultural products units – during that time.
The company’s marketing department – which is responsible for selling commodities on world markets – has also become ‘robust’. In the meantime, according to Glencore, the performance of its industrial operations “reflected lower prices, but nevertheless delivered a sequential and year-on-year overall volume improvement.” In particular, the energy products sector experienced solid growth during the quarter.
The company’s thermal coal production reached 33 million tons – almost double the past production figures – over the course of the initial nine months of its accounting year. At the same time, Glencore churned out approximately 17 million barrels of oil.
During the first nine months of the period, Glencore’s zinc production fell by 5.7% to 511.9 million tons, and its copper production dropped by 16.3 percent, reaching 394.2 million tons.
Nickel production rose by 16.1 percent to 25.8 million tons during the quarter.
Production of agricultural products was increased by 11 percent to 5.5 million tons. The company, however, is not hopeful of the future conditions, stating, “we are not assuming any short term material improvement in global macro conditions.”
With its reserves of approximately $9.0 billion (7.0 billion euros), Glencore accentuated that it was “confident that in this environment our business model places us in a strongly competitive position.”
Glencore is planning a merger with another Swiss commodities titan, Xstrata, as the two companies finally got along in early October after leaving behind the differences between them that had been hindering their amalgamation for months.
If the merger is successful, the gigantic new company will have a worth of 67 billion euros ($87 billion), enough to outpace most of the large corporations in this industry.
The general assembly’s of the two companies are scheduled to meet on November 20 in Zoug in central Switzerland, and are expected to approve the entire procedure before this year ends.
According to the Financial Times, Glencore might have to terminate some of its current activities to get clearance from the regulatory authorities.
While the European Commission is getting concerned over the combined power of the two companies in the European zinc industry, Glencore is planning to call off a contract with Nyrstar, the Belgian-Swiss mining group and the world’s largest zinc producer, according to the British financial daily.