Glencore (LON:GLEN) return extra $4.5 bln to shareholders after record earnings

Glencore, a miner and trader, announced Thursday that it will return $4.5 billion to investors. This includes a $3 billion share buyback. The company reported a record-breaking half-year profit, largely due to the high price of coal.

  • Share buybacks to be paid $3 billion by the company
  • A $1.45 Billion special dividend is also promised
  • The adjusted EBITDA more than doubled to $18.92 Billion

Glencore, unlike its mining competitors, refuses to follow investor pressures to leave fossil fuels. Glencore mines thermal coke, which has seen record prices, reflecting the shortages during prolonged COVID lockdowns. It also trades millions of barrels per year of crude oil.

Glencore Chief Executive Gary Nagle stated that Glencore’s industrial operations had seen a significant increase in earnings. However, he noted that the group continues to face inflation pressures, which he called a “consistent headwind”.

The $4.5 billion shareholder return also includes a $1.45 Billion special dividend, bringing 2022 payouts up to $8.5 Billion. In February, the company announced a $4 billion payout that included a dividend and a $550m share buyback.

The adjusted core earnings of the group, or EBITDA, more than doubled to $18.92 Billion in the six months through June, compared to $8.7 Billion a year ago and higher than analysts’ expectations of $18.4B.

The trading division’s adjusted operating profit for the half-year was $3.7 billion. This is far more than its $3.2 billion long-term outlook.

Joshua Warner, City Index market analyst, stated that there is no quick solution to the energy market problems and that this should keep the prices of LNG and coal elevated in the second half.

“However, the outlook on metals looks more complicated given supply chain disruptions and rising costs as well as weakening Chinese demand.”

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