In a Fresh Sign of Strength, Glencore Quadruples Earnings
February 21 2018 - 4:26AM
Dow Jones News
By Scott Patterson
Glencore PLC on Wednesday said it quadrupled its earnings in
2017, increased its dividend payout to investors and was on the
lookout for deals -- fresh signs of strength in the global mining
industry.
The Swiss mining-cum-trader said net income for 2017 rose more
than four times from the previous year, to $5.8 billion from $1.4
billion. Strong trading gains strong gains in the company's trading
division, reaching $3 billion for the first time since 2008,
boosted results.
Glencore declared a dividend for 2018 of $2.9 billion, or 20
cents a share, to be paid in two equal payments -- well ahead of
expectations for a $2.2 billion dividend.
Chief Executive Ivan Glasenberg, one of the mining industry's
most aggressive deal makers, said booming cash flows at the company
gave it plenty of room to keep returning cash to investors or to
consider acquisitions.
"There's room to do transactions," Mr. Glasenberg said on a
media call early Wednesday. "If nothing becomes available, if we
don't get things at the right price, we won't do it," he added.
Rising commodity prices have helped drive Glencore's comeback.
Over the past 12 months, copper prices have gained about 20%, coal
has climbed about 12%, and cobalt has more than doubled. Those
materials are among the biggest contributors to Glencore's
profits.
Glencore's strong results follow earlier solid earnings reports
by BHP Billiton Ltd. and Rio Tinto PLC. Anglo American PLC reports
2017 earnings Thursday.
Glencore said results were somewhat offset by rising cost
pressures. While it maintained marketing guidance of between $2.2
billion and $3.2 billion in adjusted earnings, current conditions
and commodity prices "would point to the top end of the range being
achieved," said RBC Capital Markets mining analyst Tyler Broda in a
note.
Revenue for the year rose 34% to $205.5 billion, Glencore said.
Net debt fell to $10.78 billion by the end of the year, from $15.5
billion at the end of 2016. A consensus estimate from 10 analysts
compiled by FactSet had forecast net income for the year of $5.7
billion, while 19 analysts on FactSet forecast revenue of $213.88
billion.
Write to Scott Patterson at scott.patterson@wsj.com
(END) Dow Jones Newswires
February 21, 2018 04:11 ET (09:11 GMT)
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