TIDMGLEN
RNS Number : 1832P
Glencore PLC
16 February 2021
NEWS RELEASE
Baar, 16 February 2021
Preliminary Results 2020
Highlights
Glencore's Chief Executive Officer, Ivan Glasenberg,
commented:
"The Covid-19 pandemic is an extraordinary challenge that
continues to impact many aspects of day-to-day life. Against this
backdrop, the strength of our 2020 underlying performance is a
credit to our highly skilled and dedicated employees, and also
reflects our unique business model and ability to quickly adapt to
changing market conditions and customer needs.
"Navigating from recessionary conditions in the first half to a
strong price recovery for most commodities in the second, Adjusted
EBITDA finished the year flat at $11.6 billion. An outstanding
Marketing performance lifted EBIT by 41% to $3.3 billion, while
Industrial Adjusted EBITDA fell 13% to $7.8 billion, primarily
reflecting weaker coal prices. A notable improvement was seen at
our Katanga operation in the DRC, where its successful ramp-up
lifted Africa copper EBITDA to $712 million from a loss of $349
million in 2019. Strong second half cash flows repositioned Net
debt of $15.8 billion within our target range, allowing for the
resumption of distributions. We are recommending to shareholders a
distribution of $0.12 per share.
"As the world focuses on the pathway to recovery from Covid-19,
it is clear that meeting the goals of the Paris Agreement has taken
on even greater urgency. While innovation and technological
advances have transformed how we live and work, the commodities
needed to enable this have not. Our commodities are essential in
developing all facets of infrastructure needed to deliver the goals
of energy and mobility transition.
"We are focused on playing our part in supporting the Paris
goals and have set out a clear strategy to address our total
emissions footprint - being Scope 1, 2 and 3 emissions.
"Glencore has been transforming the global commodities industry
for nearly half a century, growing from a trader of ferrous and
non-ferrous metals, minerals and crude oil, into one of the world's
largest natural resource companies. Today, the business and its
portfolio of commodities is uniquely positioned for the needs of
the future. It is ready to support the transition to a low-carbon
economy and realise its ambition of net-zero by 2050. We remain
focussed on creating sustainable long-term value for all
stakeholders while operating in a responsible manner across all
aspects of our business"
Change
US$ million 2020 2019 %
----------------------------------------------------- ------------ ------------ --------------
Key statement of income and cash flows highlights(1)
:
Revenue 142,338 215,111 (34)
Adjusted EBITDA 11,560 11,601 -
Adjusted EBIT 4,416 4,151 6
(1,903
Net loss attributable to equity holders ) (404) (371)
Loss per share (Basic) (US$) (0.14) (0.03) (380)
Funds from operations (FFO)(2) 8,325 7,865 6
Cash generated by operating activities before
working capital changes 8,568 10,346 (17)
Net purchase and sale of property, plant and
equipment(2) 3,921 4,966 (21)
US$ million 31.12.2020 31.12.2019 Change %
----------------------------------------------------- ------------ ------------ ------------
Key financial position highlights:
Total assets 118,000 124,076 (5)
Net funding(2,3) 35,428 34,366 3
Net debt(2,3) 15,844 17,556 (10)
----------------------------------------------------- ------------ ------------ ------------
Ratios:
FFO to Net debt(2) 52.5% 44.8% 17
Net debt to Adjusted EBITDA 1.37 1.51 (9)
1 Refer to basis of presentation on page 7.
2 Refer to page 11, also noting that 2019 FFO was materially
impacted by the lag of income taxes paid in 2019, in respect of
2018 profitability.
3 Includes $652 million (2019: $607 million) of Marketing
related lease liabilities.
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 110 for definitions and reconciliations and
to note 2 of the financial statements for reconciliation of
Adjusted EBIT/EBITDA.
Healthy RESULTS
- $11.6bn Adjusted EBITDA, flat year over year (y/y), with
stronger Marketing and Industrial metals offset by weaker coal
prices
- Net income pre-significant items: $2.5bn, in line with 2019
- Significant items are mainly non-cash impairment charges
amounting to $5.9bn (2019: $2.4bn), primarily in respect of Mopani,
Colombian coal and the African oil portfolio. Resulting statutory
loss of $1.9bn
- Net purchase and sale of PP&E: $3.9bn, down 21%
- Proposed $0.12/share ($1.6bn) 2021 distribution
Resilient industrial asset performance
- Industrial Assets Adjusted EBITDA $7.8bn, down 13%. Strong
metals performance outweighed by weaker coal prices
- Metals $7.3bn (+31%), Energy $1.0bn (-73%); balance is Corporate and other
- Early Covid-19 impacts followed by multi-year highs for base
metals. Energy complex also recovered into year-end
- Cost/margin performance: Cu 94c/lb (-15c/lb y/y); Zn -7c/lb
(-35c/lb y/y); Ni 376c/lb (-22c/lb y/y); coal $45.90/t ($11/t
margin)
Outstanding marketing results
- Marketing Adjusted EBIT $3.3bn, c. +$1bn y/y (+41%)
- Energy $1.8bn (+33%) driven by exceptional price
movements/dislocations and logistics/storage demand
- Metals $1.7bn (+53%) reflects supportive market conditions and
absence of cobalt market challenges experienced in 2019
- Viterra agricultural business contributed $211m (2019: $58m) share of net earnings
- Unchanged longer-term guidance range of $2.2-3.2bn Adjusted EBIT
strong balance sheet
- Net debt $15.8bn, successfully repositioned in our $10-16bn
target range; targeting below the middle of the range by end
2021
- Net debt / Adjusted EBITDA down to 1.37x
- RMI $19.6bn, near the top end of our $15-20bn target range,
reflecting higher metal prices and carry-trade opportunities
- Available committed liquidity of $10.3bn; bond maturities
capped at c.$3bn in any given year
- Spot illustrative free cash flow generation of c.$7.2bn from
Adjusted EBITDA of $16bn, using end of January 2021 prices
Sector-LEADING CLIMATE STRATEGY
- Medium-term Paris aligned total C0(2) e emissions reduction
targets and 2050 net zero ambition for Scope 1+2+3
- Responsible stewardship of declining coal business over time as industry decarbonises
- Climate strategy to be put to shareholders for an advisory vote at our AGM in April
Portfolio OPTIMISation continuing
- Finalised agreement for sale of Mopani, with completion expected in Q2 2021
- Informed the Colombian government of our intention to relinquish Prodeco's mining licences
- Contributed our share of Alumbrera into the larger MARA joint venture
To view the full report please click
https://www.glencore.com/dam:jcr/39edd425-7a17-4b9d-8f0b-051e11da1083/GLEN-2020-Preliminary-Results.pdf
For further information please contact:
Investors
Martin Fewings t: +41 41 709 m: +41 79 737 martin.fewings@glencore.com
2880 5642
Media
Charles Watenphul t: +41 41 709 m: +41 79 904 charles.watenphul@glencore.com
2462 3320
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 60 responsibly-sourced commodities that advance everyday
life. The Group's operations comprise around 150 mining and
metallurgical sites and oil production assets.
With a strong footprint in over 35 countries in both established
and emerging regions for natural resources, Glencore's industrial
activities are supported by a global network of more than 30
marketing offices. Glencore's customers are industrial consumers,
such as those in the automotive, steel, power generation, battery
manufacturing and oil sectors. We also provide financing, logistics
and other services to producers and consumers of commodities.
Glencore's companies employ around 145,000 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. Our ambition is to be a net
zero total emissions company by 2050
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Glencore since the date of this document or that the information
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