Glencore profits to fall by a third

COMMODITY trader Glencore is set to post a large drop in profits this week as boss Ivan Glasenberg nurses his biggest ever paper loss on his investment.

The mining giant is forecast to show a 30pc fall in halfyear operating profit to £2.8bn after being hit hard by the commodity slump and shrinking Chinese economy.

Glencore’s shares have fallen to a record low of 172.85p, a far cry from its 530p debut on the stock market four years ago.

Billionaire Glasenberg’s 8.4pc stake was worth £3.1bn after the float but the value of his firm has almost halved from £38bn to £23bn, shrinking his paper fortune to £1.9bn. Like other mining stocks, Glencore has been hammered by the tumbling price of iron ore while the price of copper – in which Glencore has a high exposure – has also fallen.

Glencore, which merged with miner Xstrata in 2012 in a mega-deal that catapulted Glasenberg into the limelight, has underperformed rivals Rio Tinto and BHP Billiton because they are more diversified.

There was further pain for Glasenberg after reports that activist investor Harris Associates has taken a £250m stake in the business. The firm has a track record in bringing about change in the firms in which it invests and has ousted bosses.

It separated Maurice and Charles Saatchi from their advertising agency, that still bares their names, in the 1990s.

Glasenberg, who has been chief executive of Glencore since 2002 and joined the firm in 1984, has made no secret that he wants to do another big deal.

Last year Glencore approached Rio Tinto to create the world’s largest miner. The talks are off for now but experts believe it is only a matter of time before they do a deal.

Glasenberg has received around £380m in dividends since the company floated and Glencore says it has returned to investors more than it raised at the float.