Glencore PLC (LSE:GLEN) said first-half profits from its marketing operation would exceed what it would normally make in a good year as it continued to benefit from surging commodity prices, particularly coal.
In an unscheduled update ahead of the interims in late July, the miner said adjusted earnings before interest and tax (EBIT) from the business would exceed US$3.2bn.
To put that into context, Glencore’s marketing division would normally book EBIT of US$2.2-$3.2bn annually.
The mining major also took the opportunity to reveal the direct impact of the current commodity market turmoil on its coal operation.
Glencore said it had been affected by the ‘dislocation in energy markets over the year to date, resulting, at times, in record pricing differentials’.
This translated to a portfolio mix adjustment to US$82 to US$86 per tonne, from US$32.80, though ‘free on board’ costs have also risen – to US$75-$78 per tonne from US$59.30.
Glencore is unique among the majors in having a large trading arm sitting alongside its mining operations.