3rd Dec 2019 14:53
(Alliance News) - Glencore PLC on Tuesday targeted reducing debt going ahead, with extra shareholder returns to come if possible.
Amongst other priorities for 2020, such as reducing debt, Glencore said it will be transitioning to a "new generation of leadership". Chief Executive Ivan Glasenberg has been in charge of the company for nearly 18 years, since January 2002, and has worked at Glencore since 1984.
Late last year, Bloomberg reported Glasenberg was planning on stepping down within the next three to five years, with several current employees being "trained" for succession.
The Swiss commodity broker and mining giant has maintained its USD10 billion to USD16 billion guidance range for net debt for 2020, and is targeting a net debt to adjusted earnings before interest, tax, depreciation, and amortisation ratio of 1 times, compared to 1.24 times at the end of June.
Glencore is currently nearly at the end of its current buyback programme. It has only USD90 million left to go from its current USD2 billion programme, which is due to finish at the end of 2019.
Another buyback programme will be set up "as and when surplus free cash flow generation allows", Glencore said.
Regarding the dividend, Glencore is targeting a 20 US cent total dividend, and it wants to match this in 2020.
Glencore has reiterated its target of raising at least USD1 billion from the sale of non-core assets during 2019 and 2020. So far, it has sold USD300 million worth.
On the mining front, Glencore sees a "largely flat" production profile over the next three years. Zinc and oil production is set to rise, with coal and nickel staying flat, but copper and cobalt dipping as the Mutanda mine in the Democratic Republic of the Congo is put onto care & maintenance.
Mutanda's shutdown was confirmed in June, with the company blaming a decline in cobalt prices.
Production guidance given at the time of its third-quarter update in October has been held, save for coal, which has been reduced to 140 million tonnes from 145 million tonnes due to a safety stoppage in South Africa and reduced volumes in Colombia.
Glencore also said there has been an "unacceptable" level of fatalities so far in its operations, with 16 deaths so far in 2019.
Glencore said 2019 marketing adjusted earnings before interest and tax, which encompasses Glencore's commodity trading operations, is tracking within the firm's long-term guidance range of USD2.2 billion to USD3.2 billion per year. In 2018, the figure was USD2.4 billion.
Glencore's shares in London were 3.6% lower on Tuesday afternoon at 235.95 pence each, with Johannesburg shares down 4.0% at ZAR44.84.
By George Collard; [email protected]
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