Glencore gives investors $2.9bn in dividends after ‘strongest’ results ever

In Last Deal, Glasenberg Bets on Coal’s Long, Lucrative Twilight

Glencore CEO Ivan Glasenberg. (Image courtesy of St. Gallen Symposium | Via YouTube)

Miner and commodities trader Glencore (LON:GLEN) said Wednesday it would pay shareholders $2.9bn in dividends after achieving what it called its “strongest results on record”, which attributed mainly to a sharp recovery on commodity markets and a strong performance from its marketing unit.

The 2017 results leave Ivan Glasenberg, the head of the Swiss company, well positioned to continue doing what he knows best — deals.

Speaking after the publication of annual results, Glasenberg said the company was on track to generate around $10 billion of free cash flow this year, which could be used to pursue more acquisitions if opportunities arose.

The Swiss firm not only has the firepower to strike deals, but is better positioned than any of its peers to capitalize on its exposure to battery minerals, particularly copper and cobalt.

“We work opportunistically,” Glasenberg said according to FT.com. “Right now there is no big idea on the radar screen, but look at what happened last year — opportunities presented themselves and we were able to move on them. Going forward we will do the same.”

Last year, the company stroke deals worth more than $4 billion in copper, oil, zinc and coal. This left Glencore clearly more exposed than any of its peers to battery minerals, particularly copper and cobalt, which are needed for electric vehicles and other new technology.

And the company expects to produce even more of those metals over the next three years, with anticipated output growth of 25% for copper, 30% for nickel and 13% for cobalt.

Glencore posted full-year overall adjusted profit of $14.8 billion and said its trading business gained 3% to exceed $3 billion for the first time since 2008. Net debt, in turn, decreased by 31% to $10.7 billion, the bottom of the company’s $10-$16bn target range.

Not surprisingly, the company’s shares skyrocketed on the news, gaining almost 4% to trade at 399.3 pence by 9:42AM London time, the biggest intraday gain since August.

“We look to the future with confidence,” said Glasenberg in a statement. “We believe our unrivalled positioning in ‘Tier 1’ commodities and ‘Tier 1’ assets will continue to create compelling value for all stakeholders,” he said.