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4 Novembver 2015
Shares in Glencore (GLEN) remain in recovery mode, with a Q3 update and production report clearly putting investors at ease as one of the first official business reports since the September share price plunge on debt level concerns. This comes via pleasing progress on much-needed debt reduction and a new target of 15-20% lower by year-end to $25bn with several asset sales ($900m from silver announced yesterday) already complimenting an equity placement and dividend suspension. While this is good, music to investors ears will be management’s ability to reiterate FY adjusted EBIT guidance of $2.5-2.6bn for its marketing arm thanks to stronger commodities trading in Q3 despite still depressed prices. Shareholders may even be hopeful that the 10 Dec investor update call will include improved guidance on production/capex/costs for 2016-18 allowing for a solid FY Production report in Feb, and that continued strong trading can help deliver consensus-beating financials come March.
Mike van Dulken, Head of Research
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
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