Glencore Returns to Profit

Glencore PLC returned to profitability last year despite a sharp downturn in the commodities it mines and trades.

The mining giant posted a net profit of $2.31 billion for 2014, a sharp turnaround from a net loss the previous year when Glencore took $11.4 billion in charges, most of which was attributable to its 2013 merger with Xstrata PLC.

Net income excluding one-time items for the year was $4.3 billion, higher than analysts' expectations for a gain of $4.04 billion. Total debt dipped to $30.5 billion from $35.8 billion at the end of 2013.

"While there remains the potential for future economic setbacks and no shortage of bearishness towards commodities in financial markets, physical demand for our raw materials remains healthy," Chief Executive Ivan Glasenberg said in a statement.

Glencore took a hit in its mining business, largely because of weak coal markets. Earnings before interest and taxes from Glencore's industrial operations, which includes its mines, dipped 17% to $524 million in 2014 from the previous year. Mr. Glasenberg has said his company's blockbuster merger with Xstrata is "a big play on coal."

The company has been making efforts to trim its coal output amid concerns that the market is oversupplied. It shut down production at coal mines in Australia during the Christmas break, and last week it said it planned to curb Australian coal production about 15%. In late January, it announced plans to reduce output in South Africa by at least five million tons a year.

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