Glencore Returns to Profit on Commodities Boom -- Update
February 23 2017 - 4:00AM
Dow Jones News
By Scott Patterson
LONDON-- Glencore PLC swung into the black last year on surging
commodity prices, an eye-popping recovery for the Swiss mining
giant, which a year earlier reported billions of dollars in
losses.
The U.K.-listed company on Thursday reported net income of $1.4
billion for 2016, compared with a $4.9 billion net loss the
previous year. Revenue adjusted for discontinued operations rose to
$152.9 billion from $147.4 billion a year earlier.
Glencore's earnings are the latest positive sign from the mining
sector. BHP Billiton Ltd. and Anglo American PLC earlier this week
also returned to profit, cashing in on higher commodity prices.
Glencore Chief Executive Ivan Glasenberg said stronger earnings
and lower debt levels will give the company flexibility to either
scoop up deals or return cash to shareholders.
"I don't think there's big stuff around to look at, but we'll
see what opportunities come," he said on a conference call with
reporters. "If we don't find big opportunities, we'll kick out big
dividends."
Net debt fell to $15.5 billion by year-end from $25.9 billion at
the end of 2015, below the lower end of the range of its guidance
of $16.5 billion to $17.5 billion, as higher commodity prices, a
dividend suspension and $4.7 billion in asset sales took pressure
off the company's balance sheet.
Glencore said its trading business posted earnings before
interest and taxes of $2.8 billion last year, a 14% gain from 2015,
amid stronger demand, particularly from China, and drops in
inventory levels.
It expects its trading group to report adjusted earnings in the
range of $2.2 billion and $2.5 billion in 2017. That is lower than
previous years' guidance of as much as $3.2 billion, due to its
sale of half of its agriculture division last year.
Write to Scott Patterson at scott.patterson@wsj.com
(END) Dow Jones Newswires
February 23, 2017 03:45 ET (08:45 GMT)
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