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GLENCORE PLC - GLN - 2021 Half-Year Report
2021/08/05 08:00:00Download PDF Stock report
GLN - 2021 Half-Year Report
GLENCORE
GLENCORE PLC
(Incorporated in Jersey under the Companies (Jersey) Law 1991)
(Registration number 107710)
JSE Share Code: GLN
LSE Share Code: GLEN
ISIN: JE00B4T3BW64
LEI: 2138002658CPO9NBH955
NEWS RELEASE
Baar, 5 August 2021
2021 Half-Year Report
Highlights
Glencore’s Chief Executive Officer, Gary Nagle, commented:
“I am pleased to report strong progress and group performance over the first half of 2021. 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 $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 $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
$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 Q2.
“Against such first-half backdrop, cash generation was strong, with FFO almost doubling to $7.3 billion, and
Net debt of $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 c.$0.5 billion special cash distribution ($0.04/share) for payment in
September and a $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 c.$2.8 billion.
“The strength of Glencore’s enviable portfolio today reflects Ivan’s persistent pursuit of value creation and
his vision in unlocking the enhanced benefits and synergies from combining a large diversified suite of
Industrial assets with related Marketing activities. Our company is ideally positioned in terms of commodity
mix and business model and I look forward to working with all our stakeholders to realise our ambition of
meeting the expected resource needs of the future, while creating sustainable long-term value.”
US$ million H1 2021 H1 2020 Change % 2020
Key statement of income and cash flows highlights(1):
Revenue 93,805 70,961 32 142,338
Adjusted EBITDA(*) 8,654 4,833 79 11,560
Adjusted EBIT(*) 5,305 1,472 260 4,416
Net income/(loss) attributable to equity holders 1,277 (2,600) n.m. (1,903)
Earnings/(loss) per share (Basic) (US$) 0.10 (0.20) n.m. (0.14)
Funds from operations (FFO)(2*) 7,310 3,686 98 8,325
Cash generated by operating activities before working capital
changes 7,181 4,317 66 8,568
Net purchase and sale of property, plant and equipment(2*) 1,767 1,700 4 3,921
US$ million 30.06.2021 31.12.2020 Change %
Key financial position highlights:
Total assets 122,419 118,000 4
Net funding(2,3*) 31,854 35,428 (10)
Net debt(2,3*) 10,624 15,844 (33)
Ratios:
FFO to Net debt(2,3,4*) 112.5% 52.5% 114
Net debt to Adjusted EBITDA(3,4*) 0.69 1.37 (50)
1 Refer to basis of presentation on page 4.
2 Refer to page 8.
3 Includes $1,005 million (2020: $652 million) of Marketing related lease liabilities.
4 H1 2021 ratios based on last 12 months’ FFO and Adjusted EBITDA, refer to APMs section for reconciliation.
* Adjusted measures referred to as Alternative performance measures (APMs) which are not defined or specified under the requirements of International
Financial Reporting Standards; refer to APMs section on page 64 for definitions and reconciliations and to note 3 of the financial statements for
reconciliation of Adjusted EBIT/EBITDA.
HIGHER COMMODITY PRICES DRIVE SIX MONTH ADJUSTED EBITDA TO $8.7 BILLION
– Industrial Adjusted EBITDA of $6.6 billion (H1 2020: $2.6 billion) reflects a significantly improved
Adjusted EBITDA mining margin of 38% (H1 2020: 22%)
– Strong Marketing Adjusted EBIT performance of $1.8 billion, albeit down $220 million (11%) on H1 2020,
reflecting the exceptional oil trading conditions in the prior period. All key commodity departments
materially contributed
– Full year Marketing Adjusted EBIT expected at the top end of our long-term $2.2-3.2 billion p.a. range
INDUSTRIAL UNIT COSTS IN LINE WITH EXPECTATIONS
– H1 unit costs were: Copper 85¢/lb, zinc -18¢/lb (18¢/lb ex-gold), nickel (ex Koniambo) 254¢/lb and
thermal coal $54/t
– Full year estimated unit costs: Copper 80¢/lb, zinc -13¢/lb (28¢/lb ex-gold), nickel (ex Koniambo)
277¢/lb and thermal coal $55/t (all including by-product credits as appropriate)
– H1 Industrial capex was $1.8 billion (H1 2020: $1.8 billion); full year expected around $5.0 billion
NET INCOME ATTRIBUTABLE TO EQUITY HOLDERS OF $1.3 BILLION
– Stated after the required accounting recycling to the statement of income of Mopani’s non-controlling
interests upon its disposal and a non-cash impairment of Koniambo ($625 million)
NET DEBT OF $10.6 BILLION (INCLUDING $1.0 BILLION OF MARKETING-RELATED LEASE LIABILITIES)
– Towards the low end of our $10-16 billion target range; well below our current c.1x Net debt/ Adjusted
EBITDA target
– Continued healthy cashflow generation expected for balance of 2021, basis current performance and
prices
– Available committed liquidity of $9.3 billion at 30 June 2021
– Announced today an additional cash distribution of c. $530 million ($0.04/share) and a $650 million
share buyback
– Brings total shareholder returns for 2021 to $2.8 billion, being the 12¢/share base distribution
announced in February and the above “top-up” elements
To view the full report please click https://www.glencore.com/dam/jcr:40ca2cbb-3bef-4564-8395-
45db79f00c59/GLEN-2021-Half-Year-Report.pdf and on the JSE on
https://senspdf.jse.co.za/documents/2021/JSE/ISSE/GLN/Interim21.pdf.
For further information please contact:
Investors
Martin Fewings t: +41 41 709 2880 m: +41 79 737 5642 martin.fewings@glencore.com
Media
Charles Watenphul t: +41 41 709 2462 m: +41 79 904 3320 charles.watenphul@glencore.com
www.glencore.com
Glencore LEI: 2138002658CPO9NBH955
Notes for Editors
Glencore is one of the world’s largest global diversified natural resource companies and a major producer and
marketer of more than 60 responsibly-sourced commodities that advance everyday life. The Group's operations
comprise around 150 mining and metallurgical sites and oil production assets.
With a strong footprint in over 35 countries in both established and emerging regions for natural resources,
Glencore's industrial activities are supported by a global network of more than 30 marketing offices.
Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation,
battery manufacturing and oil sectors. We also provide financing, logistics and other services to producers
and consumers of commodities. Glencore's companies employ around 135,000 people, including contractors.
Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the
International Council on Mining and Metals. We are an active participant in the Extractive Industries
Transparency Initiative. Our ambition is to be a net zero total emissions company by 2050.
Important notice concerning this document including forward looking statements
This document contains statements that are, or may be deemed to be, “forward looking statements” which are
prospective in nature. These forward looking statements may be identified by the use of forward looking
terminology, or the negative thereof such as “outlook”, 'plans', 'expects' or 'does not expect', 'is
expected', 'continues', 'assumes', 'is subject to', 'budget', 'scheduled', 'estimates', 'aims', 'forecasts',
'risks', 'intends', 'positioned', 'predicts', 'anticipates' or 'does not anticipate', or 'believes', or
variations of such words or comparable terminology and phrases or statements that certain actions, events or
results 'may', 'could', 'should', “shall”, 'would', 'might' or 'will' be taken, occur or be achieved.
Forward-looking statements are not based on historical facts, but rather on current predictions,
expectations, beliefs, opinions, plans, objectives, goals, intentions and projections about future events,
results of operations, prospects, financial condition and discussions of strategy.
By their nature, forward-looking statements involve known and unknown risks and uncertainties, many of which
are beyond Glencore’s control. Forward looking statements are not guarantees of future performance and may
and often do differ materially from actual results. Important factors that could cause these uncertainties
include, but are not limited to, those disclosed in the last published annual report and half-year report,
both of which are freely available on Glencore’s website.
For example, our future revenues from our assets, projects or mines will be based, in part, on the market
price of the commodity products produced, which may vary significantly from current levels. These may
materially affect the timing and feasibility of particular developments. Other factors include (without
limitation) the ability to produce and transport products profitably, demand for our products, changes to the
assumptions regarding the recoverable value of our tangible and intangible assets, the effect of foreign
currency exchange rates on market prices and operating costs, and actions by governmental authorities, such
as changes in taxation or regulation, and political uncertainty.
Neither Glencore nor any of its associates or directors, officers or advisers, provides any representation,
assurance or guarantee that the occurrence of the events expressed or implied in any forward-looking
statements in this document will actually occur. You are cautioned not to place undue reliance on these
forward-looking statements which only speak as of the date of this document.
Except as required by applicable regulations or by law, Glencore is not under any obligation and Glencore and
its affiliates expressly disclaim any intention, obligation or undertaking, to update or revise any forward
looking statements, whether as a result of new information, future events or otherwise. This document shall
not, under any circumstances, create any implication that there has been no change in the business or affairs
of Glencore since the date of this document or that the information contained herein is correct as at any
time subsequent to its date.
No statement in this document is intended as a profit forecast or a profit estimate and past performance
cannot be relied on as a guide to future performance. This document does not constitute or form part of any
offer or invitation to sell or issue, or any solicitation of any offer to purchase or subscribe for any
securities.
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal
entities. In this document, “Glencore”, “Glencore group” and “Group” are used for convenience only where
references are made to Glencore plc and its subsidiaries in general. These collective expressions are used
for ease of reference only and do not imply any other relationship between the companies. Likewise, the words
“we”, “us” and “our” are also used to refer collectively to members of the Group or to those who work for
them. These expressions are also used where no useful purpose is served by identifying the particular company
or companies.
Sponsor
Absa Corporate and Investment Bank, a division of Absa Bank Limited
Date: 05-08-2021 08:00:00
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