Soaring profits hand Glencore chief £4bn
MINING titan Glencore has posted its best-ever results, boosting boss Ivan Glasenberg’s pockets by around £4bn.
The Anglo-Swiss zinc, copper nickel and cobalt producer yesterday announced a 44pc increase in profit to £10.3bn, lifted by rising prices for commodities.
It marks a major turnaround since it hit rock bottom in a commodities downturn in 2015, with shares soaring around 450pc since then.
Shares have leapt from 73p in January 2016 to more than 404.55p yesterday, adding more than £4bn to chief executive Glasenberg’s 1.2bn shares in little more than two years, following losses.
The 61-year-old owns more than 8pc of the firm, after he and fellow directors snapped up millions of shares to boost its funds in late 2015.
Head of copper Telis Mistakidis owns 3.12pc, or 450.1m shares, while head of zinc Daniel Mate owns 3.15pc, or 454.14m, shares.
All stand to gain from a hike in dividends announced yesterday.
Glencore is paying out £2bn, or 14p per share. That should give Glasenberg a further £172m based on his holding of 1.2bn shares.
He said: ‘our performance in 2017 was our strongest on record, driven by our leading marketing and industrial asset business. We look to the future with confidence. We believe our unrivalled positioning will continue to create compelling value for all stakeholders.’
Glencore, which has around 146,000 employees and 150 mining, oil and agricultural sites, said debt fell by around £3.5bn to £7.2bn.
The firm said it would steer clear of some of the reckless deals that meant it was so badly hit.
Yesterday, it said it was now poised to take advantage of soaring demand for electric cars. It believes that will mean an extra 4.1m tons of copper, 1.1m tons of nickel and 314,000 tons of cobalt will be required by 2030. Glencore estimates its cobalt production will increase 133pc over the next three years.
The firm has a strong grip on the global cobalt production as it is the only major company with assets in the Democratic Republic of Congo, which has about two-thirds of the world’s cobalt.
Its Katanga Mining is expected to produce as much as 34,000 tonnes in 2019.
The price of cobalt has more than doubled last year, and that prompted the government in Congo to seek higher royalties.
Glencore said: ‘The electric vehicle upheaval continues to unfold, with the scale of market penetration and investment, by battery and automotive manufacturers and infrastructure players, adjusting progressively upwards.
‘This provides an additional dimension of future demand growth for a number of our key commodities.’
Analysts at Barclays said that the results were strong and were ahead of estimates.
They added: ‘We continue to argue that perceptions of inferior asset quality versus peers are hard to justify with, amongst other things, the lowest coal and copper cash costs of the diversifieds.’.