RE:RE:RE:RE:Glencore in troubleDon't get me wrong. I was only trying to point out that NIF is a tiny component of Glencore.
It is probably bad form to quote myself, but I posted the following back in January and it is still true today:
Of course there is uncertainty, not only what will happen in 2017 but tomorrow:-
- an aseroid could strike the earth
- oil could fall to $10 and devastate the world economy
- oil could jump to $200 and devastate the world economy
- Shooting starts in the middle east - war breaks out - the world economy tanks
- Shooting stops in the middle east - peace breaks out - the world economy tanks
The one thing that is for sure is that no matter what happens Glencore and their ilk will make money. (Except possibly for the asteroid.......if it is too big) Glencore is a trader and that's what traders do.......
They make money when S#%& happens.....or doesn't happen. Have a look at Glencores annual report for 2013. Revenue was $233 billion. Non current Asset value (plants and equippment) was $89 billion. The EBITDA of Glencore (including Xstrata) was $10 billion
Those are billions with a B The EBITDA of the Metals and Minerals (Cu, Ni, Zn, Pb, Co, PMs) division was $7 billion ($7000 million). Of that $7 billion, $1.7 billion ($1700 million) was earned by "Marketing Activities" which includes the profit they made supplying all of the feed to CEZ and the agency fees they charge CEZ to market all of the Zn. "Industrial Activities" accounted for $5.3 billion ($5300 million). This includes the profit they made on processing their own Zn through their own Zn refineries in Spain, Kazakstan, Italy, Germany and 25% of CEZ (as well as the metal that they toll refine through third party refineries).
The earnings that are distributed as NIF dividends amount to $18 million per year. (37.5 million units @ $0.50 per year). $18 million is a lot of money but it only about 0.25% of their $7 billion metals EBITDA. They view this $18 million as rightfully being theirs....... They are pissed because they have inherited this deal that was made in the distant past and they have a bunch of pesky unit holders and the majority of the board members that keep saying no.
No matter how you look at it (Revenues, Assets or EBITDA), NIF is about 0.25% of Glencore. It is barely a fly speck on the windshield of the airliner that is Glencore. If the fund share holders can be scared into selling at some lowball price because they are afraid of the asteroid or some other calamity Glencore will be happy.
BB