Glencore Plc will pay out $1.18 billion through dividends and share repurchases after surging metal prices helped drive first-half profit to a record.
The world’s biggest commodities trader reported core earnings of $8.65 billion for the period, compared with $4.83 billion a year earlier. The company said in a statement Thursday it would pay $530 million in dividends and buy back $650 million worth of shares.
Glencore is the latest of the big miners to report record profits this earnings season, following Rio Tinto Group and Anglo American Plc. Producers and traders are cashing in after a broad rally in commodity prices in the first half, as governments around the world unleashed trillions of dollars in stimulus packages to help the global economy recover, boosting demand for raw materials.
“The subsequent economic recovery has seen prices of most of our commodities surging to multi-year highs amid accelerating demand and lingering supply constraints,” said Chief Executive Officer Gary Nagle, who succeeded long-time boss Ivan Glasenberg at the end of June. “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.”
Glencore’s returns to shareholders are dwarfed by the amounts being paid out by its rivals. Rio, Anglo and Vale SA all benefited from surging iron ore prices, a commodity that Glencore doesn’t produce. However, the company said its giant trading business reported profits of $1.8 billion, almost on a par with the record $2 billion it reported last year. Its mines posted profits of $6.6 billion.
Glencore said its net debt fell to $10.6 billion, at the bottom of its long-term range.
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