Breakingviews

Glencore deserves credit for lessons learned

December 10, 2015

The Swiss miner and commodities trader will cut debt even faster than it vowed in September. Planning for copper prices below current levels is wise. Chief Executive Ivan Glasenberg can’t control China’s demand for metals, but at least his balance sheet now reflects reality.

Anglo American is facing a crisis of confidence

December 8, 2015

Collapsing commodity prices led the coal, copper and diamonds miner to suspend its dividend on Dec. 8. It’s also slashing jobs and investment. Big London-listed miners including Anglo American have lost 47 percent of their market value this year. Yet things could still get worse.

Anglo American dividend cut just the beginning

December 4, 2015

Confidence in the mining giant is at rock bottom. Cost savings are paling beside the slide in commodities prices. Anglo American can save the equivalent of one-eighth of its market cap by scrapping the dividend. Shuttering production, and firesales, may now be necessary evils.

Rolls-Royce can emerge from turbulence intact

November 12, 2015

Cutting next year’s pre-tax profit estimates by a third will intensify calls for a break-up of the UK engine maker. But that would neither solve Rolls’ problems, which mostly stem from past strategic errors and cheap oil– nor would it make much sense at the current share price.

StanChart faces years of pain for humdrum gain

November 3, 2015

New CEO Bill Winters is dumping risky loans, cutting costs, and raising $5.1 bln in capital. He thinks the loss-making lender can rebound by serving affluent consumers in emerging markets. But even if all goes to plan, a modest 10 pct return on equity is still five years away.

Shell throws kitchen sink at low oil

October 29, 2015

The Anglo-Dutch major’s quarterly results were scarred by a net charge of $7.9 billion. It’s painful, and the comparison with rival Total unflattering. Shell was able to cover dividends with cashflow in the last year, but the balancing act is only going to get more difficult.

BP is making the best of a bad situation

July 28, 2015

Underlying profit at the UK oil major fell 64 percent. The lower oil price is the main culprit. Costs and capital expenditure are coming down, and operating cashflow remains resilient. But with the oil price falling again, BP has more challenges than opportunities.

Lloyds investment case hinges on its next dividend

February 27, 2015

The UK bank’s first payout since 2008 is an encouraging milestone. But it’s largely symbolic. The critical valuation issue is whether Lloyds’ pledge to pay out at least half its future earnings represents a floor or a ceiling - and whether the regulator allows fatter payouts.

Santander’s next task: sustainable profit growth

February 3, 2015

After raising capital and trimming the dividend, new boss Ana Botin has proved her leadership credentials. The Spanish bank’s results show provisions and costs down, and net profit up. The real test will be maintaining the momentum even as key economies like Brazil falter.

Agenda for Tesco CEO: price cuts, board and UK

August 29, 2014

There’s a jumbo profit alert, a hacked-back dividend and lower capex. The new chief exec is also bringing forward his start date. Dave Lewis needs to reduce prices, rebuild the board, and launch a strategic review of the international business.