10 Aug Increased H1 2017 earnings allows Glencore to ease net debt
Glencore has announced earnings of US$6.74 billion during H1 2017, up 68% from $4.02 billion a year ago, allowing the Swiss-based mining giant to reduce net debt to $13.9 billion.
The multi-commodity focused miner’s move to cut net debt by $1.6 billion impacted its decision to keep its dividend unchanged at $1 billion this year, reflecting a desire to further balance the books before rewarding shareholders.
Rising prices for coal, zinc and copper helped the company’s profits increase in the first half of the year, despite relatively quiet production growth within these commodities which represent some of Glencore’s core assets.
Copper prices have increased almost 18% this year, recently trading as high as $6,500 a tonne, while zinc prices soared by 30% to $2,700 a tonne, compared with 2016 trading prices.
Glencore is also a big producer of cobalt, which also surged this year along with other energy metals, an area which CEO Ivan Glasenberg highlighted as a focus area ahead of the electric revolution.
“As we look forward, the potential large-scale roll out of electric vehicles and energy storage systems looks set to unlock material new sources of demand for enabling underlying commodities, including copper, cobalt, zinc and nickel,” said Glasenberg.