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GLN - 2018 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
NEWS RELEASE
Baar, Switzerland
8 August, 2018
2018 Half-Year Report
To view the full report please click here:
http://www.glencore.com/dam/jcr:0895391c-ffb4-4b2d-8f1e-ffc77574f8f4/GLEN-2018-Half-
Year-Report-FINAL.pdf
Highlights
Glencore’s Chief Executive Officer, Ivan Glasenberg, commented: “The strength of our
diversified business model and commodity mix is once again demonstrated with a 13%
increase in net income and a 23% increase in Adjusted EBITDA to $8.3 billion.
“Against a volatile but favourable trading and commodity price environment, Marketing
performed towards the upper end of its guidance range with a 12% increase in Adjusted
EBIT to $1.5 billion. Our Industrial business recorded Adjusted EBITDA of $6.7 billion,
up 26%, reflecting the highly competitive cost positions of our asset base.
“Cash generation remains strong, with FFO up 8% to $5.6 billion and our balance sheet
healthy, with Net debt of $9 billion. In addition to the $2.85 billion of shareholder
distributions announced earlier this year, we recently announced a $1 billion buy-back
programme.
“While broader market conditions are likely to remain volatile, confidence in our
business prospects and current share trading levels point to near-term focus on
deleveraging and shareholder returns / buybacks funded through cash generation. We remain
focused on creating value for shareholders through the disciplined allocation of long-
term capital.”
US$ million H1 2018 H1 2017 Change % 2017
Key statement of income and cash flows highlights(1):
Net income attributable to equity holders 2,776 2,450 13 5,777
Adjusted EBITDA# 8,270 6,741 23 14,762
Adjusted EBIT# 5,119 3,801 35 8,552
Earnings per share (Basic) (US$) 0.19 0.17 12 0.41
Funds from operations (FFO)(2)# 5,625 5,201 8 11,556
Net cash generated by operating activities before 6,805 5,599 22 11,866
working capital changes
Capital expenditure? 2,165 1,679 29 4,234
US$ million 30.06.2018 31.12.2017 Change %
Key financial position highlights:
Total assets 134,464 135,593 (1)
Net funding(2)# 31,894 32,898 (3)
Net debt(2)# 8,997 10,673 (16)
Ratios:
FFO to Net debt(2,3)# 133.2% 108.3%
Net debt to Adjusted EBITDA(3)# 0.55x 0.72x
1 Refer to basis of preparation on page 5.
2 Refer to page 9.
3 H1 2018 and H1 2017 ratio based on last 12 months’ FFO and Adjusted EBITDA, refer to APMs section for
reconciliation.
# Adjusted measures referred to as Alternative performance measures (APMs) which are not defined or specified
under the requirements of International Financial Reporting Standards; refer to APMs section on page 72 for
definition and reconciliations and note 3 of the financial statements for reconciliation of Adjusted
EBIT/EBITDA and capital expenditure.
Another strong financial performance
– Adjusted EBITDA of $8.3 billion, up 23%; Adjusted EBIT of $5.1 billion, up 35%
– Net income attributable to equity holders of $2.8 billion, up 13%; net income,
pre-significant items up 40% to $3.3 billion
– Funds from operations of $5.6 billion, up 8%
– Continued balance sheet strength and flexibility: Net debt of $9.0 billion, down
16%
– EPS of $0.19 per share, up 12%
– 2nd instalment of the 2018 distribution of $1.4 billion ($0.10 per share)
payable in September
Strong Marketing performance
– Marketing Adjusted EBIT of $1.5 billion, up 12%
– Strong performances from Metals and minerals and Energy products segments, up
17% and 23% respectively
– Lower crop yields in key geographies reflected in weaker Agricultural products
performance; stronger H2 expected
Industrial assets performance underpinned by higher prices and continued cost/asset
optimisation
– Industrial Adjusted EBITDA up 26% to $6.7 billion
– Solid first-half mine cost/margin performances across the business (Cu: 88c/lb,
Zn: -11c/lb (20c/lb ex Au), Ni: 177c/lb, Coal: $35/t margin at $50/t unit cash
cost)
– Copper and zinc mine costs higher than initial FY guidance primarily due to
project ramp-up, lower by-product pricing, some modest energy cost inflation and
H2 weighted production
Growth through selective M&A
– Hunter Valley Operations large-scale premium thermal coal mine JV established in
May (49% attributable to Glencore)
– Hail Creek primarily coking coal acquisition from Rio Tinto completed on 1
August
– Downstream oil investments in South Africa, Botswana and Brazil expected to
complete in H2
Increasing returns to shareholders, funded by cash generation
– 2018E distributions / buybacks now total $4.2 billion, comprising $2.85 billion
distribution of 2017 cash flows, $0.3 billion H1 share trust purchases and $1.0
billion H2 buy-back programme
– Confidence in own business prospects and current share trading levels point to
near-term focus on deleveraging and shareholder returns/buybacks
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 2714 m: +41 79 543 3804 ash.lazenby@glencore.com
Media
Charles Watenphul t: +41 41 709 2462 m: +41 79 904 3320 charles.watenphul@glencore.com
www.glencore.com
Glencore LEI: 2138002658CPO9NBH955
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 146,000 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.
www.facebook.com/Glencore
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www.instagram.com/glencoreplc
www.linkedin.com/company/8518
www.slideshare.net/glencore
www.twitter.com/glencore
www.youtube.com/glencorevideos
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.
Sponsor
Absa Bank Limited (acting through its Corporate and Investment Banking Division)
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