Glencore digs up £600m for share buyback as half-year profits increase
Commodities giant Glencore promised investors more windfalls after announcing a $1billion (£600million) share buyback alongside an increase in half-year profits.
Underlying earnings beat expectations, increasing 8 per cent to £3.9billion in the first six months, with the fastest growth coming from Glencore’s marketing division.
Trading in metals and other commodities delivered a 23 per cent rise in profit to £960million, with the group citing improved market conditions in grain, copper, zinc and nickel.
Its mining operations racked up a 3 per cent increase to £2.9billion, with weak commodity prices offsetting higher volumes in copper.
Shareholders will be treated to a share buyback of up to £600million by March next year, while this year’s interim dividend is up 11 per cent to $0.06 US cents per share. The stock closed up 1.55p at 360.5p.
‘This is not the last,’ said chief executive Ivan Glasenberg. ‘Even if commodity prices are weaker, we know this is still a cash-generating machine and we can still go ahead with share buybacks.’
He said the fact that directors own large stakes in the company – Glasenberg’s 8.3 per cent is worth £3.9billion alone – would help ensure cash is prioritised over ambitious spending projects.
This year’s investor windfalls have been partly funded by the £3.9billion sale of the Las Bambas copper project in Peru, a condition imposed by Chinese regulators on the mega-merger with Xstrata.
‘The successful divestment of Las Bambas has improved our balance sheet to a position that now allows us to accelerate the return of excess capital to shareholders,’ said Glasenberg.
Analysts at Barclays said investors have now taken £4.8billion from the company, more than it raised when it floated in 2011, despite being burdened with costly projects started by Xstrata.
Glasenberg was optimistic about the outlook for commodity prices, saying the problem of oversupply in several commodities is easing.
Most watched Money videos
- 'Now even better': Nissan Qashqai gets a facelift for 2024 version
- Alfa Romeo reveals first electric sporty SUV Junior for Alfisti fans
- Mini celebrates the release of brand new all-electric car Mini Aceman
- Mini Cooper SE: The British icon gets an all-electric makeover
- BMW meets Swarovski and releases BMW i7 Crystal Headlights Iconic Glow
- Top Gear takes Jamiroquai's lead singer's Lamborghini for a spin
- Mercedes has finally unveiled its new electric G-Class
- Introducing Britain's new sports car: The electric buggy Callum Skye
- A look inside the new Ineos Quartermaster off-road pickup truck
- Kia's 372-mile compact electric SUV - and it could costs under £30k
- Leapmotor T03 is set to become Britain's cheapest EV from 2025
- Incredibly rare MG Metro 6R4 rally car sells for a record £425,500
- Should we buy a £400 games console for our son, 8? My...
- BUSINESS LIVE: S&P cuts BP credit outlook; BATS hit by...
- How 40-year mortgages put first-time buyers' futures at...
- Can a UK website demand I pay postage to return a guitar...
- Muggers stole my son's iPhone and took out a £25,000...
- S&P Global downgrades BP credit outlook as pace of debt...
- How to get a one-year fixed savings rate of 5.69%... and...
- Vistry agrees £580m Blackstone deal to build 1,750 new homes
- Chase Bank swaps 1% current account interest for a 1%...
- First Direct axes handy text message alerts for customers
- Royal Mint aims to sell £100m of UK coins to AMERICA -...
- Lack of cheap used EVs slowing down Britain's move to...
- Best areas to buy a home for 'outstanding' secondary...
- Checkit eyes £12m takeover bid for Crimson Tide
- Brookfield prepares bid for London-listed REIT Tritax...
- Ownership of Royal Mail should be a top election issue,...
- Melrose trio cash in from £330m bonus pot windfall as...
- Sainsbury chief Simon Roberts paid £5m last year (but...