Record profits as Glencore plan buyback and special dividend
(Posted on 05/08/22)
A first half year profit of almost $19bn has been announced by Glencore, partly driven by the company’s coal business.
Glencore’s Chief Executive Officer, Gary Nagle, commented: “Notwithstanding what has clearly been a very complex environment for our markets, our operations, and the world in general, we are pleased to report an exceptional financial performance for Glencore over the period.
“Global macroeconomic and geopolitical events during the half created extraordinary energy market dislocation, volatility, risk, and supply disruption, resulting in record pricing for many coal and gas benchmarks and physical premia, underpinning a $10.3 billion increase (119%) in Group Adjusted EBITDA to $18.9 billion. Marketing Adjusted EBIT more than doubled to $3.7 billion, with energy products the standout, while Industrial Adjusted EBITDA increased $8.4 billion to $15.0 billion period-on-period.
“Allied to the record EBITDA, our net working capital significantly increased during the period, with some $5 billion invested into Marketing, primarily Energy, in line with the materially higher oil, gas and coal prices, and their elevated volatilities. Despite this build, significant cash was generated, which reduced Net debt to $2.3 billion, allowing for today’s announcement of $4.5 billion of “top-up” shareholder returns, comprising a $1.45 billion special distribution ($0.11 per share) alongside a new $3.0 billion buyback program (c.$0.23 per share). Today’s additional returns lift total 2022 shareholder returns to c.$8.5 billion.
“Looking ahead, tightening financial conditions and a deteriorating macroeconomic environment present some uncertainty for commodity markets through the second half of the year. However, with few short-term solutions to rebalance global energy markets, coal and LNG prices look set to remain elevated during this period, particularly given the current challenge of securing sufficient and reliable energy supply for the Northern hemisphere winter ahead.
“For metals, the outlook is more complex, balancing supply risks, amid labour, water and energy shortages, supply chain disruptions, growing sovereign risk uncertainty and rising costs, against likely weakening end-use markets ex-China. There are some recent signs of China recovering from its Q2 trough, which could help to offset potentially weaker conditions in other key consuming markets.
“The combined strength of our diversified business model across metals and energy industrial and marketing positions has proved itself adept in all market conditions, which should allow us to both successfully navigate the shorter-term challenges that may arise, as well as meet the resource needs of the future. I would like to thank all our employees for their efforts and tremendous contribution during these turbulent times and as always, we remain focused on creating sustainable long-term value for all our stakeholders.”
Latest News
American Feed Industry commends vital supply chain legislation
(Posted on 23/04/24)The American Feed Industry Association (AFIA) has commended Representatives Ashley Hinson, R-Iowa-02... Read more
NGFA says NASS reports are critical to agribusiness operations
(Posted on 23/04/24)In a letter to U.S. Agriculture Secretary Tom Vilsack, the National Grain and Feed Association (NGFA... Read more
Bauxite and aluminium businesses deliver stable Rio Tinto results
(Posted on 18/04/24)Bauxite production of 13.4 million tonnes was 11% higher than the first quarter of 2023 for Rio Tinto... Read more
Rio Tinto spends more than A$16.1 billion with Australian suppliers
(Posted on 15/04/24)Rio Tinto increased its spend with suppliers and local businesses in Australia to more than A$16.1 billion... Read more
Cargill increases its renewable energy capacity by more than 40%
(Posted on 15/04/24)Cargill has reported increasing its contracted renewable energy capacity by 42% after signing five new... Read more
Agreement to set up KEZAD steel recycling and production facility
(Posted on 29/03/24)The UAE’s largest operator of integrated and purpose-built economic zones, Khalifa Economic Zones... Read more
Senate legislation includes phosphate and potash as critical minerals
(Posted on 25/03/24)The Fertilizer Institute (TFI) has praised the U.S. Senate for introducing bipartisan legislation to... Read more
Agribusiness expert’s legacy and optimism for GrainCorp’s future
(Posted on 18/03/24)Farmer, Company Director and long-standing member of the GrainCorp Board of Directors, Dan Mangelsdorf... Read more
Research offers Rotterdam guidelines for raw material transition
(Posted on 15/03/24)Different product processes, non-fossil raw materials and rare materials are crucial for a CO2-neutral... Read more
Bunge Chevron Ag Renewables to build Louisiana processing plant
(Posted on 10/03/24)Bunge and Chevron have announced approval of a final investment decision for their joint venture Bunge... Read more
