Glencore’s £380m divi as profits soar

GLENCORE will return another £860m to investors after the mining and commodities trader notched up record profits.

The Switzerland-based group will pay a £380m special dividend and buy back more shares after months of ballooning commodities prices swelled its coffers.

The FTSE100 group made £1.4bn in the first six months of the year – up from a loss of £3.7bn in the same period of 2020.

It was the maiden set of results under Glencore’s chief executive, Gary Nagle, who took over from longtime boss Ivan Glasenberg this summer.

The commitment from Glencore comes on top of an alreadydeclared £1.1bn dividend for the year and arrives amid a stellar results season from the London Stock Exchange’s heavyweight miners. They have all turbocharged their returns to investors as the recovery in the global economy has sparked rallies in the prices of key materials such as copper and steelmaking ingredient iron ore.

This has sparked talk of a commodities ‘supercycle’, which could see prices climb and climb for years to come.

Glencore believes this, as do many analysts and companies, which argue the green revolution and huge post-Covid infrastructure spending mean there will be rampant demand for years to come.

But the effect that short-term price swings can have was in full view yesterday.

The Footsie’s miners all tumbled after iron ore futures took a turn for the worst, falling 6pc overnight on Wednesday.

The price wobble can be explained by sluggish demand in China, which is the biggest consumer of raw materials. It has instructed its steel mills to limit their production to reduce pollution. And outbreaks of the Delta variant in China have also raised alarm. Anglo American (down 5pc, or 173.5p, to 3270.5p) fell to the bottom of the Footsie leaderboard, followed by Rio Tinto (down 4.2pc, or 265p, to 6027p) and BHP Group (down 3.8pc, or 90p, to 2280p). Glencore, which does not mine iron ore but markets it from some customers, fell 1.6pc, or 5.3p, to 324p.

The iron ore upset also dragged on steel group Evraz, which closed down 1.4pc, or 8.6p, to 601p despite reporting that profits had morethan doubled in the first half.

The mining slump dragged the FTSE 100 into the red, with the index edging down 0.05pc, or 3.43 points, at 7120.43.

The FTSE 250 rose 0.7pc, or 158.38 points, to 23506.11, though mid-cap gold miner Centamin (down 3.2, or 3.4p, to 102.65p) also chalked up losses after it said profits and production stalled.

Hammerson too was in the red, falling 4.8pc, or 1.77p, to 35.71p after it blamed a ban on evictions for slowing its recovery and said it would transform empty shops into hotels, offices and homes.

Estate agent Savills, on the other hand, was a winner. Shares rose 7.8pc, or 90p, to 1250p after the stamp duty cut and cheap mortgages helped it rocket to record first-half profits of £64m.

This was double the same period of 2019 and up eightfold on 2020.

WPP’s results also impressed, as the advertising giant revealed revenues reached £6.1bn and have returned to pre-Covid levels a year sooner than it had expected.

Companies have ramped up their marketing budgets – particularly online – as economies have opened back up. WPP shares rose 2.7pc, or 25.8p, to 966.8p.

And Cineworld jumped 4.2pc, or 2.62p, to 65.48p as data showed the UK box office saw its best performance last weekend since the start of the pandemic. Takings over the July 30 to August 1 period came in at £11m – the highest since February 2020, according to the UK Cinema Association.

DC Comics’s epic The Suicide Squad and Walt Disney’s Jungle Cruise were among the big hits.