Glencore Shareholders To Be Paid Nearly £6bn After Massive Profits

Mining and commodities company’s pre-tax profit jumped 60% to £28.2bn in 2022, up £10.6bn on 2021

Glencore will pay almost £6bn to shareholders after the mining and commodities company posted record pre-tax profits exceeding £28bn in 2022, boosted by soaring oil and coal prices.

The Switzerland-based group, whose market capitalization makes it one of the biggest FTSE 100 companies, disclosed a payout of £5.9bn ($7.1bn) to shareholders, including dividends and a new £1.2bn share repurchase programme.

This announcement occurred as the miner’s adjusted pre-tax profit surged 60% to a record £28.2bn in 2022, an increase of £10.6bn in 2021.

Glencore’s trading division also posted bumper profits of £5.3bn, which represented a 73% jump compared with a year before and was largely the result of rocketing energy prices after Russia invaded Ukraine.

These, said the company, were caused by its energy traders “successfully navigating the extreme market imbalances, volatility and dislocations across crude oil, LNG, refined products, coal, and logistics infrastructure”.

Gary Nagle, Glencore’s chief executive, added that the firm had been able to earn record profits because of rocketing energy prices and “the generally high and volatile 2022 commodity price environment”.

Glencore said its industrial division’s profits had climbed by 60% to £22.6bn because of substantially higher coal prices. In January last year, the company bought the remaining two-thirds that it did not own of the Cerrejón mine in Colombia, South America’s biggest open-pit coal mine.

However, Glencore raised a warning over the economic outlook for the coming year, signaling high levels of inflation across the world and the resulting increases in interest rates as central banks attempt to deal with soaring prices.

Despite this, the company expects to profit from China’s decision to reopen its economy after eliminating its zero-Covid strategy.

Nagle said:

“China’s reopening, however, together with a continued global focus on energy security and decarbonization/electrification, mean that demand for many of our commodities is likely to remain healthy, while supply constraints persist and inventories remain relatively low.”

Glencore’s shares dropped slightly during morning trading on Wednesday but were still nearly 20% higher than their level a year before.

It was instructed by a London court last November to pay a record £281m in fines, confiscated profits, and costs as a penalty for bribery in Africa.

This was the biggest ever financial penalty imposed on a firm by a UK court and would have been higher had Glencore not been given a one-third discount on the fine for pleading guilty to charges brought by the UK’s Serious Fraud Office.

The SFO said Glencore staff flew cash bribes to Africa in private jets and used “sham” documents to cover up the actual purposes of cash.