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    GLEN   JE00B4T3BW64

GLENCORE PLC

(GLEN)
  Report
Real-time Estimate Cboe Europe  -  03:28 2022-10-06 am EDT
504.25 GBX   +0.79%
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UPDATE 4-Glencore shareholders get $4.5 bln windfall as coal prices soar

08/04/2022 | 02:24am EDT

(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.

SURGING PRICES

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 supply chains.

"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 regulators.

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)


© Reuters 2022
Stocks mentioned in the article
ChangeLast1st jan.
ANGLO AMERICAN PLC -0.31% 2866 Delayed Quote.-4.84%
DOW JONES AFRICA TITANS 50 INDEX -0.16% 417.35 Real-time Quote.-21.89%
DOW JONES SOUTH AFRICA(ZAR) 1.29% 1836.3 Real-time Quote.-7.72%
EURO / BRAZILIAN REAL (EUR/BRL) -0.28% 5.1233 Delayed Quote.-19.95%
GLENCORE PLC 0.38% 504.3 Delayed Quote.33.43%
GOLD 0.25% 1723.08 Delayed Quote.-7.02%
LONDON BRENT OIL -0.33% 93.34 Delayed Quote.13.79%
NASDAQ COLOMBIA 0.36% 279.990393 Real-time Quote.-23.72%
RIO TINTO PLC 0.55% 5116 Delayed Quote.3.92%
S&P AFRICA 40 INDEX 0.58% 136.19 Real-time Quote.-22.12%
S&P GSCI CRUDE OIL INDEX -0.42% 480.982 Real-time Quote.14.94%
S&P GSCI GOLD INDEX 0.59% 1007.98 Real-time Quote.-6.44%
SILVER -0.03% 20.683 Delayed Quote.-10.84%
WTI -0.38% 87.688 Delayed Quote.14.86%
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Analyst Recommendations on GLENCORE PLC
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Financials (USD)
Sales 2022 266 B - -
Net income 2022 19 898 M - -
Net Debt 2022 22 516 M - -
P/E ratio 2022 3,66x
Yield 2022 10,1%
Capitalization 72 422 M 72 422 M -
EV / Sales 2022 0,36x
EV / Sales 2023 0,37x
Nbr of Employees 135 000
Free-Float 81,1%
Chart GLENCORE PLC
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Glencore plc Technical Analysis Chart | MarketScreener
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Technical analysis trends GLENCORE PLC
Short TermMid-TermLong Term
TrendsNeutralNeutralNeutral
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus BUY
Number of Analysts 20
Last Close Price 5,63 $
Average target price 7,03 $
Spread / Average Target 24,9%
EPS Revisions
Managers and Directors
Gary Nagle Chief Executive Officer & Director
Steven F. Kalmin General Manager-Finance
Kalidas V. Madhavpeddi Chairman
Patrice E. Merrin Independent Non-Executive Director
Martin James Gilbert Senior Independent Non-Executive Director
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