Glencore reinstates dividend as 2020 net debt drops, trading earnings jump
JOHANNESBURG - GLENCORE yesterday reinstated its dividend after net debt fell by 10 percent last year, helped by surging commodity prices in the second half.
The commodities trader and miner, which scrapped its dividend in August after a first-half loss amid the Covid-19 pandemic, said it was recommending a distribution of $0.12 (R1.73) per share, or a total payout of $1.6 billion.
That compares to $2.6bn announced last year before the payout was cancelled. Glencore’s trading business benefited from strong metals marketing and the storing of oil when prices plunged earlier last year, selling it later at higher prices and profiting from what is known as a contango market structure.
“Navigating from recessionary conditions in the first half to a strong price recovery for most commodities in the second, adjusted Ebitda (earnings before interest, taxes, depreciation and amortisation) finished the year flat at $11.6bn,” chief executive Ivan Glasenberg said.
The full-year adjusted Ebitda was above the $10.7bn expected in a poll of 12 analysts compiled by Vuma, while marketing earnings before interest and taxes jumped 41 percent year on year, to $3.3bn. Net debt fell to $15.8bn in 2020 from $17.6bn in 2019, helped by strong second-half cash flows, it said.