Mining and commodities giant Glencore announced plans to speed up cutting its net debt this morning but posted a two-thirds fall in profit for the first half of the year.
Lower commodity prices and trimmed production volumes pushed the company's net income down 66 per cent to $300m (£228m) in the six months to 30 June. Revenue fell six per cent to $69.4bn.
Key metals prices averaged around 20 per cent lower than during the same period of 2015, while the company's earnings were "essentially flat period-on-period" for metals industrial assets.
Despite the profit drop, the company said continued asset sales would enable it to stay on course to cut its net debt and set a new target for debt reduction to between $16.5bn and $17.5bn. Net debt fell to $23.6bn in the first half.
Chief executive Ivan Glasenberg said he was "confident and focussed on achieving even lower than previously indicated net funding and net debt levels by the end of this year".
The company also said it expects to reinstate its dividend next year.
Glencore's share price was down more than three per cent by late afternoon trading to 183.7p, dragging down the rest of the FTSE 100.
24 August 2016 @ 4:15pmGlencore (GLEN)
Why it's interesting
The company also announced an AU$880m (£510m) long-term agreement with Evolution Mining today, in which Glencore will sell all of its future gold output and 30 per cent of its copper stake in its Ernest Henry Mine in Australia.
The agreement will act as another funding boost to its net debt reduction plan and is expected to close by the end of the fourth quarter.
The Swiss firm is also said to be considering the sale of its Vasilkovskoye gold mine in Kazakhstan as part of its asset off-loading and debt management strategy. Around $2bn worth of assets is on offer.
What the company said
Chief executive Ivan Glasenberg:
Since we announced our measures to reduce debt levels last September, we have made considerable progress towards achieving our goals.
We have already largely achieved our asset disposals target of $4bn to $5bn with a diverse and material pool of asset sales’ processes also on-going. Our divestment strategy remains one of maximising value for shareholders through identifying assets where overall Glencore franchise positioning, optionality and value is substantially preserved or even enhanced.
After a difficult start to the year, the more constructive tone of markets in recent months has helped support the pricing of many of our key commodities. While we are highly cash generative at current spot prices, we remain mindful that underlying markets continue to be volatile. We are alert to and have a high degree of proven flexibility in adapting to changing market conditions.