Glencore (LSE:GLEN), one of the world’s largest mining companies and commodities traders, was the top contributor to performance for the fiscal period and the most recent quarter. The company’s first-half earnings were largely in line with our expectations and showed a significant improvement with a 58% increase in EBITDA and 334% increase in EBIT year-over-year. Notably, the company’s industrial business has shown dramatic improvement thanks to the combination of higher commodity prices and continued cost control measures. During the quarter, Glencore, in conjunction with Yancoal, announced the acquisition of the Hunter Valley Operations coal assets in Australia. The assets are a great complement to Glencore’s existing assets in the region. This transaction will boost Glencore’s production of high-quality thermal coal and, more importantly, there should be significant operational synergies. As a result, we believe this transaction is attractive both strategically and financially and that Glencore remains an attractive investment opportunity for our shareholders.
From David Herro (Trades, Portfolio)'s Oakmark International Fund 3rd quarter 2017 commentary.
