Announcing first half figures that showed a swing back into the black with a net profit of $1.72 billion for the period compared to a $9.39 billion loss in the first half last year,Glencore declared an interim dividend of $0.06 a share. It now plans to return $1 billion to investors over the next six months through a share buyback.
CEO Ivan Glasenberg said that the sale of its Las Bambas copper mine in Peru to a Chinese-led consortium for £7 billion had bolstered Glencore’s balance sheet and made it possible to accelerate the return of excess capital to shareholders.
Announcing the sale of Las Bambas on August 1, the company said: “The proceeds from the sale will immediately and materially de-gear Glencore’s balance sheet. Glencore will continue to look for opportunities to reinvest capital in line with our published returns criteria. Any surplus capital, subject to maintaining an efficient balance sheet within Glencore’s strong BBB/Baa credit ratings guidance, will be returned to shareholders, within an appropriate time frame and structure.”
“We will further revisit the outlook for both the base dividend and equity buybacks at our preliminary results in March 2015,” Glasenberg said in a statement. “We look to the future with optimism based on our strong starting point and our culture of entrepreneurialism and hard work to leverage tightening commodity fundamentals.” The re-purchased shares will be held in treasury initially so will not boost Glencore’s earnings per share. However they could be used for acquisitions.
