Glencore’s poised for record profit despite bad year

Bloomberg

Glencore Plc may have had a nightmarish year so far, but the world’s top commodity trader is still raking in mountains of money.
The company is facing a US corruption probe, got mired in a dispute with its billionaire former partner in the Democratic Republic of Congo and has been caught in the fallout from new US sanctions on Russia — among other issues. Yet despite all the bad news, Glencore is expected to report its most profitable six months ever when the company publishes first-half results on Wednesday. While some of the issues have since been resolved, the company’s shares are down 17 percent this year, compared with gains by rivals like BHP Billiton and Anglo American. Analysts are more optimistic, meaning that Glencore’s share discount to the average target price is near its widest in a decade.
“Glencore has always had reputational issues, but even by their standards this has been a particularly horrific six months,” said Ben Davis, an analyst at Liberum Capital Ltd. “Glencore is showing that it’s a riskier beast than its rivals and it trades at a discount because of that.”
Glencore is expected to report adjusted earnings before interest, taxes, depreciation and amortisation of about $8.5 billion in the first half, its biggest ever.