Glencore reported a full year loss of $1.9bn in 2020, primarily reflecting lower commodity prices in the first half and over $6bn in write downs. Underlying cash profits (EBITDA) were flat at $11.6bn.
Net debt has been reduced to $15.8bn, which is now within the $10-16bn target range. As a result, the board is proposing a 2021 dividend of $0.12 per share.
The shares rose 2.3% following the announcement.
Full Year Results
Cash profits in the Marketing division rose 42% to $3.7bn, as the division benefitted from increased volatility in commodity prices. Metals & Minerals adjusted cash profits rose 51% to $1.7bn. In the Energy division adjusted cash profits rose 36% to $2.1bn as oil trading delivered a record year thanks to increased demand for storage and logistics and the big moves in the oil price. Glencore is maintaining its long-term guidance for the division for between $2.2bn and $3.2bn in underlying operating profit.
Industrial cash profits fell by 13% to $7.8bn thanks to weaker commodity prices, especially for coal, and disruption to oil and coal operations due to the pandemic. Cash profits in the Metals & Minerals division were up 31% to $7.3bn, in part reflecting a big swing at the Katanga mine which drove the African copper portfolio to a $712m cash profit. However, cash profits were down 73% to $1.0bn in the Energy division, reflecting both lower production and prices.
Net debt fell during the second half from $19.7bn to $15.8bn, around 1.4 times cash profits., Glencore expects around $7.2bn in annualised free cash flow at January 2021 prices.
Glencore key facts
- Price/Book ratio: 0.78
- 10 year average Price/Book ratio: 1.0
- Prospective dividend yield (next 12 months): 3.4%
All ratios are sourced from Refinitiv. Please remember yields are variable and not a reliable indicator of future income. Keep in mind key figures shouldn't be looked at on their own - it's important to understand the big picture.
This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by Refinitiv. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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