Glencore returned to profit in the first half of 2021. The pandemic and production issues at some sites have severely hindered the business so far. The company has announced a special dividend for shareholders.
“Economic recovery has resulted in soaring prices for most of our raw materials, which have reached record highs more than once,” said CEO Gary Nagle.
Revenues increased by nearly a third to $93.8 billion. With commodity prices on the rise, adjusted Ebitda nearly doubled year-over-year to $8.65 billion in the first half. Net profit came in at 1.28 billion francs, compared with a loss of 2.6 billion a year earlier.
“The economic recovery has caused raw material prices to rise quickly, reaching several record highs,” said Gary Nagle, chief executive officer (CEO) of ABB, who succeeded Ivan Glasenberg this year.
Trading activities were successful, bringing adjusted Ebit to 1.8 billion in this segment. As a result of high metal prices and higher mining margins, the industrial business had adjusted EBIT of 6.6 billion, up by 152%.
Glencore shares fell 1.2% by 11.05 GMT, but still outperformed most of its peers
Citi analysts also persisted that Glencore’s strong performance laid the groundwork for a larger takeover at the end of the year and that Glencore’s commodity mix is primarily geared toward transitioning to electric vehicles and other sustainable technologies.
An exceptional dividend payment to shareholders
In the first half of the year, the coal business was hindered by lower volumes and low prices, but the situation is expected to improve by the end of the year.
The cash flow nearly doubled to 7.3 billion, while net debt stayed at the lower end of the target range, at 10.6 billion.
In September, Glencore will offer its shareholders a one-time payment of $0.53 billion, or $0.04 per share. Glencore plans to complete its $650 million share buyback program “by the time the 2022 annual results are announced.”