15th Feb 2022 18:46
(Alliance News) - Investors will be hopeful Glencore PLC is able to put long-running legal issues behind it after the miner declared healthy shareholder returns and strong earnings growth.
Glencore on Tuesday unveiled a bumper shareholder return alongside strong 2021 profit growth, though also said it has taken USD1.50 billion aside as a provision for a litany of investigations.
Revenue for 2021 grew 43% to USD203.75 billion from USD142.34 billion in 2020. This helped the firm swing to a pretax profit of USD7.38 billion from a loss of USD5.12 billion the year before. Adjusted earnings before interest, tax, depreciation and amortisation for 2021 jumped 84% to USD21.32 billion.
Of this bumper shareholder return, USD3.4 billion will comprise of a USD0.26 per share base distribution in respect to 2021 cash flow, and USD550 million through a share buyback. Glencore did not pay a dividend in 2020.
The miner, however, had to set aside a USD1.50 billion provision for probes involving the US Department of Justice, the US Commodity Futures Trading Commission, the UK Serious Fraud Office, and the Brazilian Federal Prosecutor's Office.
The US DoJ is investigating Glencore's compliance with various criminal statutes, including money laundering and fraud laws. The CFTC's probe is in connection with charges of market manipulation in commodities trading, while the UK and Brazil probes both are in connection with alleged bribery, the latter concerning Petrobras. Petrobras is a Brazilian state-owned petroleum company.
"Glencore has suffered with governance issues in the past but by setting aside USD1.5 billion to cover the resolution of bribery and corruption investigations in the UK, US and Brazil. The company is taking short-term pain in order to clear some long-term clouds which would otherwise hang over the business," said AJ Bell's Russ Mould.
By Arvind Bhunjun; [email protected]
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