15th Feb 2022 09:34
(Alliance News) - Miner Glencore PLC 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.
Also in its annual results was news that it agreed the sale of its interest in Russian oil firm OAO NK Russneft in December. Completion of the disposal is conditional on regulatory approvals and should occur in the first half of 2022.
Glencore, which did not name the buyer or any financial details of the sale, said its investment in Russneft is pledged under a loan facility issued to the company. Glencore's partnership with the Russian firm began two decades ago.
Shares in Glencore were up 3.0% at 434.95 pence in London on Tuesday. The stock rose 3.1% to ZAR88.49 in Johannesburg.
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.
"In spite of the ongoing challenges of Covid-19, 2021 was an extraordinary year for Glencore, reflecting rising demand for our metals and energy products, record adjusted Ebitda and the transition to new leadership," said Chief Executive Gary Nagle.
Adjusted earnings before interest, tax, depreciation and amortisation for 2021 jumped 84% to USD21.32 billion.
Nagle continued: "The significant improvement in the group's financial results has driven net debt down to USD6.0 billion, allowing for today's announcement of USD4.0 billion of shareholder returns."
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 expects to resolve the US, UK and Brazilian investigations this year. It continues to co-operate with an investigation by the Office of the Attorney General of Switzerland and is also in contact with the Dutch authorities in connection with an investigation which has a similar scope to that of the Swiss probe, with the timing and outcome of these two investigations uncertain.
"Looking forward, we remain focused on our strategy to enable and deliver decarbonisation and meet the increasing demand for everyday metals, while responsibly meeting the energy needs of today. We look to the future confident that we have the right pathway to succeed in a net zero economy and create sustainable long-term value for all stakeholders, while operating in a responsible manner across all aspects of our business," said Nagle.
By Lucy Heming; [email protected]
Copyright 2022 Alliance News Limited. All Rights Reserved.
Related Shares:
Glencore