GLNCY Glencore Plc (PK)

By Jaime Llinares Taboada

Glencore PLC said Tuesday that it will return $4.0 billion to shareholders after reporting record 2021 earnings on the back of higher commodity prices, and that it has booked a $1.5 billion provision to cover the potential cost of continuing investigations in the U.S., U.K. and Brazil.

The Anglo-Swiss commodity mining and trading major declared a base distribution of $3.4 billion, or $0.26 a share, in respect of 2021 cash flows, and a $550 million share-buyback program.

Glencore reported record adjusted earnings before interest, taxes, depreciation and amortization of $21.32 billion for 2021, up from $11.56 billion in 2020 and slightly above market consensus of $21.24 billion, compiled by the company and based on 15 analysts' estimates.

"Following Covid-19's severe economic impacts in 2020, a recovery in demand, together with multiple supply-side issues, resulted in generally significant inventory drawdowns and prices for most of our key commodities reaching multi-year highs," Glencore said.

Full-year net profit was $4.97 billion compared with a $1.90 billion loss a year earlier.

Net profit was hit by a $1.5 billion provision related to several investigations by authorities including the U.S. Department of Justice, the U.S. Commodity Futures Trading Commission, the U.K. Serious Fraud Office and the Brazilian Federal Prosecutor's Office. Glencore said that it expects to resolve the investigations in those three countries this year, and that $1.5 billion represents its best estimate of the costs to resolve them.

Adjusted earnings before interest and tax from the Marketing business--Glencore's name for its trading arm--rose 11% to $3.7 billion, exceeding the long-term guidance range.

Funds from operations more than doubled to $17.06 billion, and net debt was reduced by 62% throughout the year to $6.04 billion.

"In spite of the ongoing challenges of Covid-19, 2021 was an extraordinary year for Glencore, reflecting rising demand for our metals and energy products, record adjusted Ebitda and the transition to new leadership," Chief Executive Gary Nagle said.

"Looking forward, we remain focused on our strategy to enable and deliver decarbonization and meet the increasing demand for everyday metals, while responsibly meeting the energy needs of today," he added.

Shares at 0802 GMT were up 2.5% at 432.55 pence.

Write to Jaime Llinares Taboada at jaime.llinares@wsj.com; @JaimeLlinaresT

(END) Dow Jones Newswires

February 15, 2022 03:24 ET (08:24 GMT)

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