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GLENCORE PLC - GLN: Media Release 2017 Half Year-Report

Release Date: 10/08/2017 07:05
Code(s): GLN     PDF:  
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GLN: Media Release 2017 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
10 August 2017

NEWS RELEASE
                                        2017 Half-Year Report
                                      Well positioned for the future

To view the full report please click here:
http://www.glencore.com/assets/investors/doc/reports_and_results/2017/GLEN-Half-Year-Report-2017-.pdf

Glencore’s Chief Executive Officer, Ivan Glasenberg, commented: “Our extensive efforts to reposition our
balance sheet and drive further industrial asset portfolio improvements over the last twenty-four months,
are reflected in our strong first-half financial performance. Adjusted EBITDA and EBIT increased 68%
and 334% respectively over H1 2016, while Net debt fell a further $1.6 billion to $13.9 billion from end of
2016.

“Amid the best global economic growth momentum seen in recent years, our assets reported strong
margins, generated by significantly better commodity prices and the favourable cost structures now
embedded across the portfolio. Marketing similarly performed well, with Adjusted EBIT up 13% to $1.4
billion, as improving fundamentals created a more supportive marketing environment for our core
commodities.

“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. Our portfolio of Tier 1 commodities underpins our ambition to create
significant long-term value for Glencore shareholders.”

US$ million                                                      H1 2017       H1 2016    Change %    2016
                                                  1
Key statement of income and cash flows highlights :
Net income/(loss) attributable to equity holders                 2,450         (369)      n.m.        1,379
                 2
Adjusted EBITDA                                                  6,741         4,020      68          10,268
              2
Adjusted EBIT                                                    3,801         875        334         3,930
Earnings per share (Basic) (US$)                                 0.17          (0.03)     n.m.        0.10
                              3,4
Funds from operations (FFO)                                      5,201         2,762      88          7,770
                    5
Capital expenditure                                              1,679         1,571      7           3,497


US$ million                                                                30.06.2017    31.12.2016   Change %
Key financial position highlights:
Total assets                                                               119,098       124,600      (4)
                                4
Current capital employed (CCE)                                             9,335         10,075       (7)
            3,4
Net funding                                                                30,190        32,619       (7)
        3,4
Net debt                                                                   13,873        15,526       (11)
Ratios:
                 3,4,6
FFO to Net debt                                                            74%           50%          48
                            4,6
Net debt to Adjusted EBITDA                                                1.07x         1.51x        (29)
                                4,6
Adjusted EBITDA to net interest                                            8.57x         6.70x        28

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1   Refer to basis of preparation on page 5.
2   Refer to note 3 of the interim financial statements for definition and reconciliation of Adjusted EBIT/EBITDA.
3   Refer to page 8.
4   Refer to Glossary for definition.
5   Refer to note 3 of the interim financial statements for reconciliation of capital expenditure.
6   H1 2017 ratio based on last 12 months’ FFO, Adjusted EBITDA and net interest. Refer to Glossary for reconciliation.


Strong financial performance

                  –     Adjusted EBITDA of $6.7 billion, up 68%; Adjusted EBIT of $3.8 billion, up 334%
                  –     Net income attributable to equity holders of $2.5 billion, up from a loss of $369 million
                  –     Funds from operations of $5.2 billion, up 88%
                  –     EPS increased to $0.17 per share from a loss of $0.03 per share in 2016

Underpinned by a diversified portfolio of Tier 1 assets and Tier 1 commodities…

                   –    Favourable fundamentals and rising prices for key commodities amid robust growth
                        momentum in the global economy: copper +22%, cobalt +109%, zinc +49% and thermal
                        coal realisations +50% to 70% period-on-period
                   –    Low-cost structures/high margins embedded in our key commodity industrial divisions:
                        copper 88c/lb, zinc –9c/lb (16c/lb ex gold), nickel 240c/lb and thermal coal $45/t at a
                        $32/t margin

… and the resilience of Marketing

                   –    Marketing Adjusted EBIT of $1.4 billion, up 13% (+22% with Agriculture on a like-for-like
                        basis)
                   –    Reflecting the YTD performance, increased full year 2017 guidance range by $100
                        million to $2.4-$2.7 billion.

Balance Sheet further strengthened

                   –    Net funding and Net debt reduced respectively by $2.4 billion & $1.6 billion over the first-
                        half to $30.2 billion and $13.9 billion
                   –    Robust cash flow coverage ratios at 30 June:
                             – FFO to Net debt: 74%
                             – Net debt to Adjusted EBITDA: 1.07x

Well positioned for the future

                   –    Material growth projects / options in copper and zinc
                   –    Poised to benefit from potential new demand opportunities that market growth in electric
                        vehicles and energy storage systems could bring
                   –    Strong investment grade balance sheet provides headroom for highly selective growth
                        opportunities
                  –     Annualised illustrative free cash flow of $7.1 billion at current spot prices, based on spot
                        annualised Adjusted EBITDA of $15 billion

For further information please contact:

Investors
Martin Fewings                            t: +41 41 709 2880                m: +41 79 737 5642                martin.fewings@glencore.com
Ash Lazenby                               t: +41 41 709 27 14               m: +41 79 543 38 04               ash.lazenby@glencore.com
Media
Charles Watenphul                         t: +41 41 709 2462                m: +41 79 904 3320                charles.watenphul@glencore.com

www.glencore.com
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Notes for Editors
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 sectors. We also provide financing, logistics and other services to
producers and consumers of commodities. Glencore's companies employ around 155,000 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.

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Disclaimer
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this
document, “Glencore”, “Glencore group” and “Group” are used for convenience only where references are made to Glencore plc
and its subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other
relationship between the companies. Likewise, the words “we”, “us” and “our” are also used to refer collectively to members of the
Group or to those who work for them. These expressions are also used where no useful purpose is served by identifying the
particular company or companies.

Absa Bank Limited (acting through its Corporate and Investment Banking Division)




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