Wrap Text
2016 Half-Year Report
GLENCORE PLC
(Incorporated in Jersey under the Companies (Jersey) Law 1991)
(Registration number 107710)
JSE Share Code: GLN
LSE Share Code: GLEN
HKSE Share Code: 805HK
ISIN: JE00B4T3BW64
Baar, Switzerland
24 August, 2016
2016 Half-Year Report
Delivering on our debt reduction plan, underpinned by industry-leading cost
performance and robust operating cash flows
To view the full report please click here:
http://www.glencore.com/assets/investors/doc/reports_and_results/2016/GLEN-Half-Year-Report-2016-.pdf
Glencore’s Chief Executive Officer, Ivan Glasenberg, commented: “Since we announced our measures to
reduce debt levels last September, we have made considerable progress towards achieving our goals.
Supporting these targets, our industrial assets are demonstrating industry-leading cost and cashflow
performances, while the resilience of our Marketing business has again been demonstrated, with a 14%
increase in its first half Adjusted EBIT to $1.2 billion.
“We have already largely achieved our asset disposals target of $4-5 billion with a diverse and material
pool of asset sales’ processes also on-going. Our divestment strategy remains one of maximising value
for shareholders through identifying assets where overall Glencore franchise positioning, optionality and
value is substantially preserved or even enhanced. The Glencore Agri stake sale, for example, positions it
for the industry’s inevitable consolidation in the years to come. We remain confident and focussed on
achieving even lower than previously indicated net funding and net debt levels by the end of this year.
“After a difficult start to the year, the more constructive tone of markets in recent months has helped
support the pricing of many of our key commodities. While we are highly cash generative at current spot
prices, we remain mindful that underlying markets continue to be volatile. We are alert to and have a high
degree of proven flexibility in adapting to changing market conditions.”
US$ million H1 2016 H1 2015 Change % 2015
Key statement of income and cash flows highlights 1:
Adjusted EBITDA2 4,020 4,611 (13) 8,694
Adjusted EBIT2 875 1,412 (38) 2,172
Net income attributable to equity holders of the parent pre- 300 882 (66) 1,342
significant items3
Net loss attributable to equity holders of the parent (369) (676) n.m. (4,964)
Funds from operations (FFO)4,5 2,762 3,487 (21) 6,615
Capital expenditure 1,571 3,189 (51) 5,957
US$ million 30.06.2016 31.12.2015 Change %
Key financial position highlights:
Total assets 127,854 128,485 –
Net funding(4,5) 38,983 41,245 (5)
Net debt(4,5) 23,580 25,889 (9)
Ratios:
FFO to Net debt(4,5,6) 24.9% 25.6% (3)
Net debt to Adjusted EBITDA(5,6) 2.91x 2.98x (2)
Adjusted EBITDA to net interest(5,6) 5.41x 6.24x (13)
1 Refer to basis of preparation on page 4 of the Half-Year Report.
2 Refer to note 3 of the interim financial statements for definition and reconciliation
of Adjusted EBIT/EBITDA.
3 Refer to significant items table on page 5 of the Half-Year Report.
4 Refer to page 7 of the Half-Year Report.
5 Refer to Glossary for definition.
6 H1 2016 ratio based on last 12 months’ FFO, Adjusted EBITDA and net interest.
Highlights
- Strong and improving cash generation despite lower commodity prices and production
volumes
- 2016 first half Adjusted EBITDA of $4.0 billion, down 13%
- Funds from operations of $2.8 billion, down 21%
- Capital expenditure of $1.6 billion, down 51%, comfortably offsetting the reduced FFO
- Industry-leading cost positions
- Outstanding first-half operational unit cost performance in our key commodities: copper 97c/lb,
zinc -3c/lb (15c/lb ex-gold), nickel 246c/lb and thermal coal $37/t
- Full year unit cost estimates have been reduced to reflect stronger than expected cost
improvements over the year to date
- Marketing remains a unique, defensive earnings driver
- Marketing Adjusted EBIT increased by 14% to $1.2 billion, supported by strong contributions
from Metals & Minerals
- Full year Adjusted EBIT guidance of $2.4-2.7 billion remains unchanged
- Continued strong liquidity and balance sheet flexibility
- Committed available liquidity of $14.9 billion at 30 June 2016 ($15.2 billion at the end of 2015)
comfortably covers our next three years of bond maturities
- Public market credit spreads and CDS have substantially normalised
- Targeting even lower Net funding and Net debt of $31-32 billion and $16.5-17.5 billion by the
end of 2016
- $2.3 billion reduction in Net funding and Net debt during the first half
- Agreed asset sales of $3.9 billion, well on track to deliver the targeted $4-5 billion
- A diverse and material pool of asset sales’ processes continues
- Annualised free cash flow generation >$4.5 billion, based on Adjusted EBITDA of c.$10.5
billion at current spot commodity prices
For further information please contact:
Investors
Martin Fewings t: +41 41 709 2880 m: +41 79 737 5642 martin.fewings@glencore.com
Carlos Francisco t: +41 41 709 2369 m: +41 79 129 9195 carlos.fernandez@glencore.com
Fernandez
Media
Charles Watenphul t: +41 41 709 2462 m: +41 79 904 3320 charles.watenphul@glencore.com
Pam Bell t: +44 20 7412 3471 m: +44 77 3031 9806 pam.bell@glencore.co.uk
www.glencore.com
www.youtube.com/glencorevideos
Glencore is one of the world’s largest global diversified natural resource companies and a major producer
and marketer of more than 90 commodities. The Group's operations comprise around 150 mining and
metallurgical sites, oil production assets and agricultural facilities.
With a strong footprint in both established and emerging regions for natural resources, Glencore's
industrial and marketing activities are supported by a global network of more than 90 offices located in
over 50 countries.
Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation,
oil and food processing. We also provide financing, logistics and other services to producers and
consumers of commodities. Glencore's companies employ around 160,000 people, including contractors.
Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the
International Council on Mining and Metals. We are an active participant in the Extractive Industries
Transparency Initiative.
Sponsor
Absa Bank Limited (acting through its Corporate and Investment Bank Division)
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