Glencore buys back another $2bn in stock with more to come

By Thomas Biesheuvel

(Bloomberg) – Glencore Plc announced a new $2bn share buyback program and said it will look to increase the program later in the year if commodity prices remain robust.

The biggest commodities trader also surprised investors with news it will cap coal production.

The company reported adjusted Ebitda of $15.77bn, missing an average estimate of $16.23bn.

Key insights:

  • Glencore is rewarding shareholders after a tough year that included news of a US corruption probe and being caught up in the fallout from US sanctions on Russia.
  • Glencore shares have underperformed rivals like BHP Group even as its mining and trading businesses continue to generate giant mounds of cash.
  • Glencore’s latest buyback comes after announcing $2bn in stock repurchases last year. The company has said it’s focused on returning money to shareholders and CEO Ivan Glasenberg said last year he saw little of interest for the Swiss miner and trader on the acquisition front.
  • Glencore said it would halve copper production at its Mutanda copper mine in the Congo this year, producing just 100,000 tons. The company has been laying off workers at the site as it considers a plan to stop mining oxide ores. However, the decision comes after the country implemented a new mining code that raises taxes and royalties and as cobalt prices fall sharply.
  • Adjusted Ebitda from Glencore’s marketing business came in at $2.4bn, down 17% from a year earlier, hurt by trades on cobalt and alumina.
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