Glencore in 47 pct Q1 profit jump to $1.3 billion

AP News
Posted: Jun 14, 2011 8:07 AM
Glencore in 47 pct Q1 profit jump to $1.3 billion

Commodities giant Glencore International PLC announced a sharp 47 percent rise in first-quarter net profit Tuesday, as the company's first quarterly report since going public coincided with healthy demand for raw materials such as oil, metals and agricultural products.

The Swiss-based company said earnings during the first three months reached $1.3 billion, compared with $886 million during the same period last year.

"The second quarter seems to be tracking pretty well the first quarter," Chief Executive Ivan Glasenberg told reporters in a conference call.

Revenues rose 39 percent to $44.2 billion compared to the January-March period of 2010.

Investors are hoping Glencore's $10 billion IPO in May _ which valued the company at almost $60 billion _ will boost market sentiment with fresh mergers and acquisitions.

Glasenberg said the company has signed a non-binding purchase agreement for CST Mining Group's Peruvian copper project.

"We believe it's a good add-on to the rest of our activities in Peru," he said, noting that the mine could produce up to 100,000 tons of copper by 2013.

But he dismissed speculation about a possible takeover of Kazakhstan's European Natural Resources Corporation.

"We can confirm that although we talk to a lot of people in the sector, we are not currently actively considering a bid for ENRC," said Glasenberg.

The notoriously secretive company has faced heavy scrutiny since going public, with traders seeking to pick apart its inner workings and campaign groups criticizing its mining interests in developing countries.

Earlier this month, Glencore rejected claims by the European Investment Bank that it had failed to pay adequate tax at its Mopani copper mines in Zambia. Glasenberg said the company would be "totally vindicated" by a full audit.

He also expressed confidence that upcoming changes to British bribery law wouldn't affect the way Glencore operates.

"We are well aware of the (British Bribery) Act and we will be abiding by the Act," he said.

Glencore shares were down 2 percent on the London Stock Exchange at 512.70 pence.