Glencore first announced it was seeking investors in its agriculture unit in September 2015, as part of a debt reduction plan.

BAAR, SWITZERLAND — Adjusted earnings before interest, taxes, depreciation and amortization for the Agricultural Products business segment of Glencore Plc totaled $183 million in the first half of 2016 ended June 30, down 44.8% from $332 million in the same period of last year. Glencore noted that its Agricultural Products business segment is presented as a discontinued operation until the completion of the sale of a 49.99% stake in the segment.

Revenue for the first half of 2016 was $11.29 billion, down 4.7% from $11.851 billion in the same period of last year.

Overall, Glencore sustained a loss of $369 million in the first half of 2016, which compared with a loss of $676 million in the same period of last year. Its overall adjusted EBITDA for the first half of 2016 was $4.02 billion, down 13% from $4.611 billion in the same period of last year. The decrease was due to lower commodity prices.  Glencore said it continues to mitigate reduced industrial margin challenges through its focus on operational efficiencies, which has significantly cushioned the net impact from lower commodity prices (negative)/stronger U.S. dollar (positive).

Ivan Glasenberg, chief executive officer at Glencore.

“Since we announced our measures to reduce debt levels last September, we have made considerable progress towards achieving our goals,” Ivan Glasenberg, chief executive officer at Glencore, said when results were announced on Aug. 24. “Supporting these targets, our industrial assets are demonstrating industry-leading cost and cash flow performances, while the resilience of our Marketing business has again been demonstrated, with a 14% increase in its first half adjusted EBIT to $1.2 billion.”

Glencore first announced it was seeking investors in its agriculture unit in September 2015, as part of a plan to reduce its $30 billion debt by $10 billion. In December 2015, the company said it already had reduced debt by $8.7 billion. The company has revised its net debt reduction target to between $16.5 billion to $17.5 billion by the end of 2016.

“We have already largely achieved our asset disposals target of $4 billion to $5 billion with a diverse and material pool of asset sales’ processes also on-going,” Glasenberg said. “Our divestment strategy remains one of maximizing value for shareholders through identifying assets where overall Glencore franchise positioning, optionality and value is substantially preserved or even enhanced. The Glencore Agri stake sale, for example, positions it for the industry’s inevitable consolidation in the years to come. We remain confident and focused on achieving even lower than previously indicated net funding and net debt levels by the end of this year.”

In June, Glencore announced it had entered into a definitive agreement with British Columbia Investment Management Corporation for the purchase of a 9.99% stake in Glencore Agricultural Products. Another agreement was announced in April to sell a 40% stake of the company’s agriculture segment to Canada Pension Plan Investment Board — it is expected to close in the second half of 2016.

The Agricultural Products business segment’s grain and oilseed marketing performed satisfactorily, given the generally abundant crops, the low priced environment and, in the case of grain, a lack of volatility, the company said. Procurement margins were consistently narrow and arbitrage opportunities limited. On account of lower global prices, despite strong regional exports, port throughput rates declined in the former Soviet Union area, which impacted its business in this region, Glencore said.

Viterra Canada, a part of Glencore’s Agricultural Products business segment, posted results substantially below the first half of 2015. The smaller stock carry-over, average crop size and lower prices meant that farmers were often reluctant sellers. Combined with strong competition amongst the handling industry and continued weakness in the Canadian dollar, this led to reduced U.S. dollar procurement margins, particularly for wheat, the company said. Other negatives included quality issues in durum wheat, China’s objections to levels of canola imports, disruption in pulses shipments to India and an increase in domestic rail rates. Australian performance was negatively impacted by a smaller South Australian crop, a slower export pace as Australian wheat lacked world market competitiveness and the weaker Australian dollar, Glencore said.

Agricultural Products processed/produced 6.4 million tonnes, up 43% compared with the first half of 2015, mainly as a result of the increased crushing volumes following the acquisition in the fourth quarter of two plants (Warden in the U.S. and Becancour in Canada) as well as stronger crush volumes in Argentina and an earlier start to the sugarcane processing season in Brazil, the company said.

Oilseed processing in Argentina was satisfactory but would have been better had it not been for exceptional rains during the harvest that reduced the crop size and affected bean quality, Glencore said. Biodiesel benefitted from the return of a large export program to the U.S., Glencore said. Crush volumes for the first half of 2016 were 3.761 million, up 39% from 2.702 million in the same period of last year.

Wheat milling in Brazil suffered early in the period from weak domestic demand, but improved as the year progressed. Wheat milling was 480,000 tonnes, down 1% from 486,000 tonnes in the same period of last year.

Rice milling increased 26% in the second half to 115,000 tonnes, up from 91,000 tonnes in the same period of last year.

 “After a difficult start to the year, the more constructive tone of markets in recent months has helped support the pricing of many of our key commodities,” Glasenberg said. “While we are highly cash generative at current spot prices, we remain mindful that underlying markets continue to be volatile. We are alert to and have a high degree of proven flexibility in adapting to changing market conditions.”

Switzerland-based Glencore is one of the world’s two biggest wheat traders, handling 18% of the world’s seaborne trade, and is one of the top three agricultural exporters in Russia, Canada, Australia, and the E.U. The group is vying for a position among the world’s biggest ‘ABCD’ commodity traders – Archer Daniels Midland Co., Bunge Ltd, Cargill Inc., and Louis Dreyfus Commodities BV.