5th Aug 2021 08:47
(Alliance News) - Glencore PLC swung to half-year profit, as soaring commodities prices gave the miner and trader ample leeway to boost its cash distribution to shareholders and to buy back shares.
Baar, Switzerland-based Glencore said on Thursday its pretax income increased to USD2.01 billion in the six months that ended June 30, recovering from a pretax loss of USD5.18 billion in the same period last year, while revenue leapt 32% to USD93.81 billion from USD70.96 billion.
Adjusted earnings before interest, tax, depreciation and amortisation surged 79% to USD8.65 billion from USD4.83 billion against a favourable economic backdrop, comprising strong marketing conditions and industrial asset margins, the company said.
Glencore said it plans additional shareholder returns worth about USD1.2 billion. This will be comprised an additional USD0.04 a share cash distribution amounting to about USD530 million for payment in September and a USD650 million share buyback to be completed by the release of the full-year results in February next year.
In addition to its base cash distribution of USD1.6 billion, or USD0.12 a share, already declared, the additional amounts increase announced shareholder returns to around USD2.8 billion for the year, Glencore noted.
For the period under review, basic earnings per share were USD0.10, flipping from a loss of USD0.20 a year before.
"Following Covid-19's severe global impacts in early 2020, the subsequent economic recovery has seen prices of most of our commodities surging to multi-year highs amid accelerating demand and lingering supply constraints," said Glencore Chief Executive Gary Nagle.
Average prices for the company's key commodities' benchmarks were up 40%, with thermal coal and copper even higher at 60% compared to the first half last year.
"Fiscal and monetary stimulus, successful vaccine roll-outs and increasing momentum in relation to decarbonisation of energy systems should continue to underpin sector sentiment going forward," Nagle said.
Glencore's net debt declined 33% to USD10.6 billion on June 30, from USD15.8 billion at the end of 2020. The group said net debt was at the low end of its USD10 billion to USD16 billion billion target range.
The miner predicts full-year industrial capital expenditure of around USD5.0 billion this year.
Looking ahead, Nagle said Glencore is ideally positioned in terms of commodity mix and business model. Nagle took over from long-time CEO Ivan Glasenberg at the start of July, having previously led Glencore's coal business from Sydney.
Glencore shares were up 0.1% at 329.50 pence in London early Thursday. In Johannesburg, the stock was up 0.3% at ZAR65.98.
By Artwell Dlamini; [email protected]
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