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Glencore releases 2021 half year report

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World Coal,

Glencore has released its half year report for 1H21.

Glencore’s CEO, Gary Nagle, commented: “I am pleased to report strong progress and group performance over 1H21. 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 US$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 US$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 US$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 2Q21.

“Against such first-half backdrop, cash generation was strong, with FFO almost doubling to US$7.3 billion, and net debt of US$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 US$0.5 billion special cash distribution (US$0.04/share) for payment in September and a US$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 approximately US$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.”

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