Shares of Glencore PLC (LSE:GLEN, Financial) fell 1.94% to around 3.0345 British pounds ($3.98) on Friday following the publication of production results for full-year 2018.
The stock has been impacted by lower copper and zinc prices realized by the company in 2018 compared to the average price for the two base metals in 2017. In addition, the miner didn’t meet its guidance on copper, nickel, coal and ferrochrome production.
Copper production grew 11% to approximately 1.45 million tons, which was below guidance of 1.46 million tons. Nickel production jumped 13% to 123,800 tons, missing guidance of 132,000 tons. Coal production increased 7% to 129.4 million tons, but was below guidance of 132 million tons. In contrast, cobalt production increased 54% to 42,200 tons, exceeding guidance of 39,000 tons. Operations benefited from the resumption of operations at the Katanga mineral deposit in the Democratic Republic of the Congo, the introduction of a second production line at Koniambo in New Caledonia and the acquisition of Hail Creek mines and the Hunter Valley Operations joint venture in Australia.
Zinc production of nearly 1.07 million tons and attributable production of ferrochrome of 1.58 million tons were on par with production levels recorded in 2017. The company was expecting 1.09 million tons of zinc and 1.6 million tons of ferrochrome.The resumption of operations at the Lady Loretta of Mount Isa Mines complex in Australia in mid-2018 underpinned the production of zinc.Â
Oil production fell 8% to 4.6 million barrels because offshore fields in Equatorial Guinea underperformed in 2018. Regardless, it was in line with guidance.
In 2018, Glencore realized $5,950 per ton of copper, $2,836 per ton of zinc and $12,875 per ton of nickel. The results reflected a 3.8% and 1.9% year-over-year decline in the prices of copper and zinc and a nearly 23% increase in the price of nickel.
The chart illustrates that for the 52 weeks through Feb. 1, shares of Glencore have fallen nearly 20% and are now trading below the 200-day simple moving average line, almost on par with the 100-day line and above the 50-day line. The 52-week range is 2.6835 pounds to 4.098 pounds per share.
The market capitalization is approximately 42 billion pounds. The stock has a price-book ratio of about 1.1 versus an industry median of 1.85, a price-sales ratio of 0.24 versus an industry median of 1.31 and an EV-to-EBITDA ratio of about 5.65 versus an industry median of 9.3.
The company has a forward dividend yield of approximately 5.03%. The recommendation rating is buy and the average target price is 3.7326 pounds.
Disclosure: I have no positions in any securities mentioned in this article.
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