Anglo-Swiss multinational commodity trading and mining company Glencore has reported ‘strong financial performance’ for the first six months with adjusted EBITDA of USD8.3 billion, up 23 per cent, and adjusted EBIT of USD5.1 billion, up 35 per cent.
Net income attributable to equity holders during the period totalled USD2.8 billion, up 13 per cent; while net income, pre-significant items increased 40 per cent to USD3.3 billion. Funds from operations meanwhile, saw an increase of 8 per cent to USD5.6 billion
Net debt decreased by 16 per cent to USD9.0 billion, while EPS was increased by 12 per cent to USD0.19 per share.
Glencore saw strong performances from the metals and minerals and energy products segments in H1, up 17 per cent and 23 per cent respectively, while lower crop yields in key geographies reflected in weaker agricultural products performance, although the company is expecting stronger performance in H2.
Industrial assets performance underpinned by higher prices and continued cost/asset optimisation saw industrial adjusted EBITDA increase by 26 per cent to USD6.7 billion.
The company has also reported solid first-half mine cost/margin performances across the business (Cu: 88c/lb, Zn: -11c/lb (20c/lb ex Au), Ni: 177c/lb, Coal: USD35/t margin at USD50/t unit cash cost). Copper and zinc mine costs were higher than initial FY guidance primarily due to project ramp-up, lower by-product pricing, some modest energy cost inflation and H2 weighted production.
Glencore’s Chief Executive Officer, Ivan Glasenberg (pictured), says: “The strength of our diversified business model and commodity mix is once again demonstrated with a 13 per cent increase in net income and a 23 per cent increase in Adjusted EBITDA to USD8.3 billion.”
“Against a volatile but favourable trading and commodity price environment, Marketing performed towards the upper end of its guidance range with a 12 per cent increase in Adjusted EBIT to USD1.5 billion. Our Industrial business recorded Adjusted EBITDA of USD6.7 billion, up 26 per cent, reflecting the highly competitive cost positions of our asset base.
“Cash generation remains strong, with FFO up 8 per cent to USD5.6 billion and our balance sheet healthy, with Net debt of USD9 billion. In addition to the USD2.85 billion of shareholder distributions announced earlier this year, we recently announced a USD1 billion buy-back programme.”
“While broader market conditions are likely to remain volatile, confidence in our business prospects and current share trading levels point to near-term focus on deleveraging and shareholder returns / buybacks funded through cash generation. We remain focused on creating value for shareholders through the disciplined allocation of long-term capital.”
