Glencore reinstates dividend payment

LONDON: Glencore reinstated its dividend and flagged possible further payouts on the back of strong commodity prices as billionaire Chief Executive Ivan Glasenberg prepares to hand over the reins of the trading and mining giant.

Having scrapped its dividend in August after a pandemic-driven first-half loss, Glencore recommended a distribution of $0.12 per share for 2021, representing a bigger than expected total payout of $1.6 billion.

Shares in the company jumped 2.8% to 291 pence by 0950 GMT, making it the biggest gainer in an index of its peers in London.

Though much smaller than the $2.6 billion announced last year before the dividend was cancelled, the payout exceeds consensus market expectations of $1.3 billion and echoed the bumper dividend at mining giant BHP Group.

BHP on Tuesday declared a record interim dividend, citing strong iron ore demand from China.

Glencore, one of the world’s biggest commodity traders, could top up the dividend or launch a share buyback ater it cuts net debt below $13 billion and if commodity prices stay strong, finance chief Steve K am lin said at er the company reported 2020 results.

“It does provide potential capacity, come August or certainly the end of the year, for us to start thinking about a top-up distribution or buyback,” he told reporters.

Glencore’s trading business benefited from strong metals markets, particularly copper, nickel and zinc. It was also boosted by the storing of oil when crude prices plunged early last year, selling it later at higher prices and profiting from what is known as a contango market structure.