Glencore PLC (LSE:GLEN) (LSE:GLEN) reported a 79% jump in interim profits on higher commodity prices and announced a special dividend and a US$650mln share buyback alongside a positive outlook.
Adjusted underlying earnings (EBITDA) rose to a record US$8.7bn in the first half for the commodity trading and mining company from US$4.8bn in the year-earlier period.
"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,” said Gary Nagle in his first results statement since taking over as chief executive on July 1.
“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.”
Nagle singled out the outlook for coal in his highlights comment.
“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.”
Industrial adjusted EBITDA (earnings from its mining operations) surged to US$6.6bn, from US$2.6bn in the first half of 2020, on strong metals prices and expanded mining margins.
Adjusted earnings (EBIT) from its trading operations fell 11% from the year-earlier period when oil trading conditions were exceptional, although all key commodity departments made a contribution in the latest six months. It expects its full-year marketing adjusted EBIT to come in at the top end of its long-term US$2.2-US$3.2bn per annum range.
The mining giant will pay a special cash dividend of US$0.04 a share in September and the US$650mln share buyback is expected to be completed by the release of its full-year results next year, taking its planned 2021 shareholder returns to about US$2.8bn.