Glencore resumes dividend after cutting debt


Glencore resumes dividend after cutting debt

Published Date: 2021-02-17 | Source: Stephen Gunnion | Author: Stephen Gunnion

Glencore resumes dividend after cutting debt

The company has reported strong performances from its Marketing and Industrial metals operations, offset by weaker coal prices.

Glencore says it's well positioned as the world transitions to a low-carbon economy. It believes meeting the goals of the Paris Agreement on climate change has taken on a greater urgency following Covid-19 - and it mines many of the materials needed for the transition such as the copper, nickel and cobalt that are used in the production of electric vehicles.

Announcing annual results for the commodities mining and trading giant, outgoing CEO Ivan Glasenberg said that while innovation and technological advances had transformed how people live and work, the commodities needed to enable this had not. He said Glencore's commodities were essential in developing all facets of infrastructure needed to deliver the goals of energy and mobility transition.

After navigating recessionary conditions in the first half of last year due to the onset of the pandemic, the company said it benefitted from a strong price recovery for most commodities in the second six months. While it reported good performances from its Marketing and Industrial metals operations, this was offset by declining earnings from its coal operations, primarily due to weaker coal prices.

Revenue fell 34% to $142 billion over the year to end-December but it maintained adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) at $11.6 billion. Its net loss widened by 371% to $1.9 billion and its basic loss per share rose 380% to $0.14. The company said a notable improvement was seen at its Katanga operation in the Democratic Republic of Congo, where its successful ramp-up lifted Africa copper EBITDA to $712 million from a loss of $349 million in 2019. Strong second half cash flows helped it reduce net debt by 10% to $15.8 billion, allowing for the resumption of distributions. It has recommended a dividend of $0.12 per share.

Glasenberg is set to retire as CEO during the first half of this year and will be replaced by Gary Nagle, head of its coal assets.

The company's shares rose 4.5% to R58.99 yesterday.

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