(Adds missing word in first paragraph)
* Company to pay out $3 bln in share buyback
* Also promises $1.45 billion special dividend
* Adjusted EBITDA more than doubles to $18.92 billion
LONDON, Aug 4 (Reuters) - Shareholders in Glencore
reaped a multi-billion dollar windfall on Thursday, as the
company's adherence to thermal coal mining at a time of soaring
prices of the material generated record profits for the mining
and commodity trading group.
Unlike rivals which bowed to investor pressure to exit
fossil fuels, Glencore mines millions of tonnes of thermal coal,
whose prices have reached record highs reflecting shortages
during protracted COVID-related lockdowns and the war in
Ukraine, and trades millions of barrels of crude oil a year.
The company said it would pay out an additional $4.5
billion, including a $1.45 billion special dividend worth 11
cents per share, and a $3 billion share buyback which it said
was worth around 23 cents a share, taking 2022 payouts to $8.5
billion in total.
The company had in February announced a $4 billion payout
including a dividend and a $550 million share buyback.
The London-listed company bucked the trend of the likes of
Rio Tinto and Anglo American that have
slashed payouts after last year's bonanza, but warned about
future returns on fears that slower growth or recession in key
markets could dent commodity demand in the next few months.
Glencore, which plans to run down its thermal coal mines by
the mid-2040s, produces more than 100 million tonnes a year at
mines in Colombia, Australia and South Africa. It is Australia's
biggest coal producer with 25 mines in New South Wales,
Queensland and other parts of the country.
Glencore chief Gary Nagle told reporters that very strong
coal prices had significantly boosted the group's earnings from
its industrial operations, though he also noted it continued to
see inflationary pressures which were a "consistent headwind".
"There are obviously headwinds: higher interest rates,
higher inflation, economy slowdown, but mining and commodities
is a long-term game and we look at where the world is going. We
believe that China's recovery will come and there will be more
stimulus," Nagle said.
The group's adjusted core earnings or EBITDA more than
doubled to $18.92 billion in the six months through June,
compared with $8.7 billion a year earlier and above analysts'
expectations of $18.4 billion.
Its trading division's half-year adjusted operating profit
reached $3.7 billion, far exceeding the top end of its long-term
annual outlook range of $3.2 billion. It expects "normal market
conditions to prevail in the second half of the year."
Surging prices for fuel and other materials needed in mine
processing, coupled with tightening labour markets partly caused
by COVID-19 absenteeism, drove Glencore's costs up and disrupted
"Cost revisions are likely to partially offset some of the
earnings upside for 2022," Citi analysts said. "That said,
potential reversal of working capital in 2H and continuation of
strong earnings should support expectations of cash return."
Glencore's net debt fell to $2.3 billion in the first half
from $6 billion at the end of 2021.
The company in May agreed to pay around $1.5 billion to
authorities in the United States, Brazil and Britain to resolve
charges of price manipulation and bribery.
It still faces investigations from Dutch and Swiss
Glencore's share price rose around 2% by 0916 GMT in London,
outperforming the sector index.
($1 = 0.8235 pounds)
(Reporting by Clara Denina in London and Muhammed Husain in
Bengaluru; Editing by Uttaresh.V and David Holmes)