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Glencore revenues drop a third but earnings remain flat despite pandemic impact

The earnings figure was attributed to a stronger performance in the company’s marketing and industrial metals businesses, which offset declines caused by weaker coal prices

Glencore PLC - Glencore revenues drop by a third but earnings remain flat despite pandemic impact

Glencore PLC (LON:GLEN) said it managed to retain flat earnings in 2020 despite a sharp decrease in revenues over the year amid the coronavirus (COVID-19) pandemic.

In results for the year to December 31, the blue-chip miner reported adjusted earnings (EBITDA) of around US$11.6bn, flat year-on-year, despite a 34% decline in revenues to US$142.3bn. The earnings figure was attributed to a stronger performance in the company’s marketing and industrial metals businesses, which offset declines in other areas caused by weaker coal prices.

READ: Glencore sees base metal and coal production fall, expects rebound this year

Glencore chief executive Ivan Glasenberg highlighted a “notable improvement” in the firm’s Katanga operation in the Democratic Republic of the Congo (DRC), where a ramp-up lifted its earnings from African copper to US$712mln from a loss of US$349mln in 2019.

Glasenberg also said the company had navigated from “recessionary conditions in the first half to a strong price recovery for most commodities in the second”, adding that strong cash flows had repositioned its net debt and now allowed for the resumption of distributions to shareholders, proposing a 2021 distribution of US$0.12 per share.

Looking ahead, Glencore said its new climate strategy will be put to shareholders at its AGM in April, adding that the sale of a 73% stake in the Mopani copper project in Zambia for US$1.5bn is expected to complete in the second quarter of 2021.

"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”, the CEO said.

“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", he added.

Quick facts: Glencore PLC

Price: 283 GBX

LSE:GLEN
Market: LSE
Market Cap: £37.71 billion
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