TIDMGLEN
RNS Number : 6066H
Glencore PLC
05 August 2021
NEWS RELEASE
Baar, 5 August 2021
2021 Half-Year Report
Highlights
Glencore's Chief Executive Officer, Gary Nagle, commented:
"I am pleased to report strong progress and group performance
over the first half of 2021. Our Industrial assets recorded a much
improved safety performance, our strengthened climate commitments
are amongst the most ambitious in the sector, group half-year
Adjusted EBITDA of $8.7 billion was a record, Net debt targets were
achieved early and shareholder returns have been topped up.
"Following Covid-19's severe global impacts in early 2020, the
subsequent economic recovery has seen prices of most of our
commodities surging to multi-year highs amid accelerating demand
and lingering supply constraints. Fiscal and monetary stimulus,
successful vaccine roll-outs and increasing momentum in relation to
decarbonisation of energy systems should continue to underpin
sector sentiment going forward.
"Our marketing business excelled in this environment, recording
Adjusted EBIT of $1.8 billion. In contrast to the outsized oil
earnings that dominated last year's record first-half results,
strong trading performances were delivered by all key commodity
teams during this year. In the Industrial business, Adjusted EBITDA
of $6.6 billion was up 152%, benefiting from strong metals prices
and expanded mining margins. While our coal business was impacted
by relatively weak pricing and lower volumes earlier in the year,
we anticipate a significantly improved finish to 2021, buoyed by
the strong recovery in both thermal and coking coal prices from
Q2.
"Against such first-half backdrop, cash generation was strong,
with FFO almost doubling to $7.3 billion, and Net debt of $10.6
billion correspondingly moving to the lower end of our target
range. Accordingly, and aided by the robust cashflow currently
being generated within the business, I am pleased to announce
additional shareholder returns, comprising a c.$0.5 billion special
cash distribution ($0.04/share) for payment in September and a $650
million share buyback to be completed by the release of our full
year results next year. This overall top-up lifts planned 2021
shareholder returns to c.$2.8 billion.
"The strength of Glencore's enviable portfolio today reflects
Ivan's persistent pursuit of value creation and his vision in
unlocking the enhanced benefits and synergies from combining a
large diversified suite of Industrial assets with related Marketing
activities. Our company is ideally positioned in terms of commodity
mix and business model and I look forward to working with all our
stakeholders to realise our ambition of meeting the expected
resource needs of the future, while creating sustainable long-term
value."
Change
US$ million H1 2021 H1 2020 % 2020
----------------------------------------- ----------- ------------- ----------- -------------
Key statement of income and cash flows
highlights(1) :
Revenue 93,805 70,961 32 142,338
Adjusted EBITDA 8,654 4,833 79 11,560
Adjusted EBIT 5,305 1,472 260 4,416
Net income/(loss) attributable to equity (2,600
holders 1,277 ) n.m. (1,903)
Earnings/(loss) per share (Basic) (US$) 0.10 (0.20 ) n.m. (0.14 )
Funds from operations (FFO)(2) 7,310 3,686 98 8,325
Cash generated by operating activities
before working capital changes 7,181 4,317 66 8,568
Net purchase and sale of property, plant
and equipment(2) 1,767 1,700 4 3,921
Change
US$ million 30.06.2021 31.12.2020 %
----------------------------------- ----------- ----------- -------------
Key financial position highlights:
Total assets 122,419 118,000 4
Net funding(2,3) 31,854 35,428 (10 )
Net debt(2,3) 10,624 15,844 (33)
----------------------------------- ----------- ----------- -------------
Ratios:
FFO to Net debt(2,3,4) 112.5% 52.5% 114
Net debt to Adjusted EBITDA(3,4) 0.69 1.37 (50 )
1 Refer to basis of presentation on page 4.
2 Refer to page 8.
3 Includes $1,005 million (2020: $652 million) of Marketing
related lease liabilities.
4 H1 2021 ratios based on last 12 months' FFO and Adjusted
EBITDA, refer to APMs section for reconciliation.
Adjusted measures referred to as Alternative performance
measures (APMs) which are not defined or specified under the
requirements of International Financial Reporting Standards; refer
to APMs section on page 64 for definitions and reconciliations and
to note 3 of the financial statements for reconciliation of
Adjusted EBIT/EBITDA.
Higher commodity prices drive Six month adjusted EBITDA to $8.7
billion
- Industrial Adjusted EBITDA of $6.6 billion (H1 2020: $2.6
billion) reflects a significantly improved Adjusted EBITDA mining
margin of 38% (H1 2020: 22%)
- Strong Marketing Adjusted EBIT performance of $1.8 billion,
albeit down $220 million (11%) on H1 2020, reflecting the
exceptional oil trading conditions in the prior period. All key
commodity departments materially contributed
- Full year Marketing Adjusted EBIT expected at the top end of
our long-term $2.2-3.2 billion p.a. range
Industrial unit costs in line with expectations
- H1 unit costs were: Copper 85c/lb, zinc -18c/lb (18c/lb
ex-gold), nickel (ex Koniambo) 254c/lb and thermal coal $54/t
- Full year estimated unit costs: Copper 80c/lb, zinc -13c/lb
(28c/lb ex-gold), nickel (ex Koniambo) 277c/lb and thermal coal
$55/t (all including by-product credits as appropriate)
- H1 Industrial capex was $1.8 billion (H1 2020: $1.8 billion);
full year expected around $5.0 billion
Net income attributable to equity holders of $1.3 billion
- Stated after the required accounting recycling to the
statement of income of Mopani's non-controlling interests upon its
disposal and a non-cash impairment of Koniambo ($625 million)
Net debt of $10.6 billion (including $1.0 billion of
Marketing-related lease liabilities)
- Towards the low end of our $10-16 billion target range; well
below our current c.1x Net debt/ Adjusted EBITDA target
- Continued healthy cashflow generation expected for balance of
2021, basis current performance and prices
- Available committed liquidity of $9.3 billion at 30 June 2021
- Announced today an additional cash distribution of c. $530
million ($0.04/share) and a $650 million share buyback
- Brings total shareholder returns for 2021 to $2.8 billion,
being the 12c/share base distribution announced in February and the
above "top-up" elements
To view the full report please click
https://www.glencore.com/dam/jcr:40ca2cbb-3bef-4564-8395-45db79f00c59/GLEN-2021-Half-Year-Report.pdf
For further information please contact:
Investors
Martin Fewings t: +41 41 709 m: +41 79 737 martin.fewings@glencore.com
2880 5642
Media
Charles Watenphul t: +41 41 709 m: +41 79 904 charles.watenphul@glencore.com
2462 3320
www.glencore.com
Glencore LEI: 2138002658CPO9NBH955
Notes for Editors
Glencore is one of the world's largest global diversified
natural resource companies and a major producer and marketer of
more than 60 responsibly-sourced commodities that advance everyday
life. The Group's operations comprise around 150 mining and
metallurgical sites and oil production assets.
With a strong footprint in over 35 countries in both established
and emerging regions for natural resources, Glencore's industrial
activities are supported by a global network of more than 30
marketing offices. Glencore's customers are industrial consumers,
such as those in the automotive, steel, power generation, battery
manufacturing and oil sectors. We also provide financing, logistics
and other services to producers and consumers of commodities.
Glencore's companies employ around 135,000 people, including
contractors.
Glencore is proud to be a member of the Voluntary Principles on
Security and Human Rights and the International Council on Mining
and Metals. We are an active participant in the Extractive
Industries Transparency Initiative. Our ambition is to be a net
zero total emissions company by 2050.
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