Glencore CEO Ivan Glasenberg. Picture: BLOOMBERG/LUKE MacGREGOR
Glencore CEO Ivan Glasenberg. Picture: BLOOMBERG/LUKE MacGREGOR

Zurich — Glencore said on Wednesday that its net profits tumbled 41% in 2018, although the mining and commodity trading giant said operating profits rose to a record level, and it announced a new $2bn plan to buy back shares.

Net profit fell to $3.4bn, but the Switzerland-based firm said its measure of operating profit — adjusted earnings before interest, tax, depreciation and amortisation (ebitda) costs — rose by 8% to a record $15.8bn.

The firm’s commodity trading business saw its operating earnings fall by 17% to $2.4bn, but mining rose 15% to $13.3bn.

CEO Ivan Glasenberg said in the earnings statement that “we achieved these results in a challenging operating environment” and that Glencore’s strong cash generation would allow it to pay out roughly $2.8bn in dividends to shareholders.

He announced a new programme to buy back $2bn in shares this year, which he said could be increased depending on market conditions and progress on sales of non-core assets.

The earnings statement also showed that Glencore’s net debt rose by some $3.5bn to $14.7bn.

Glencore launched a massive cost-cutting drive in 2015 when its debt ballooned to almost $30bn while commodity prices tanked. It scrapped dividends, closed operations and sold assets in an aggressive savings effort that stabilised the company’s finances.

A rebound in commodity prices helped Glencore post bumper profits in 2017 and pay out a healthy dividend to shareholders.