Preliminary Results 2017
21 February 2018
Glencore’s Chief Executive Officer, Ivan Glasenberg, commented: “Our performance in 2017 was our strongest on record, driven by our leading Marketing and Industrial asset businesses.
“Marketing Adjusted EBIT exceeded $3 billion for the first time since 2008 and Industrial Adjusted EBITDA rose 60% to $11.5 billion. The benefit of higher commodity prices combined with a continued strong unit cost performance is reflected in enhanced mining margins within our metals and energy operations.
“Our strong cash flow generation is reflected in a 49% increase in funds from operations to $11.6 billion, while our balance sheet is conservatively positioned with net debt of $10.7 billon. We have recommended a 2018 distribution of $2.9 billion or $0.20/share, to be paid in two equal payments.
“We look to the future with confidence. We believe our unrivalled positioning in “Tier 1” commodities and “Tier 1” assets will continue to create compelling value for all stakeholders.”
|US$ million||2017||2016||Change %|
|Key statement of income and cash flows highlights1:|
|Net income attributable to equity holders||5,777||1,379||319|
|Earnings per share (Basic) (US$)||0.41||0.10||310|
|Funds from operations (FFO)◇2||11,556||7,770||49|
|Net cash generated by operating activities before working capital changes||11,866||7,868||51|
Table best viewed in landscape
|US$ million||31.12.2017||31.12.2016||Change %|
|Key financial position highlights:|
|FFO to Net debt◇2||108.3%||50.0%||119|
|Net debt to Adjusted EBITDA◇||0.72x||1.51x||(52)|
Table best viewed in landscape
1 Refer to basis of preparation on page 7 of the Preliminary Results 2017
2 Refer to page 10 of the Preliminary Results 2017
◇ 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 118 for definition and reconciliations and note 2 of the financial statements for reconciliation of Adjusted EBIT/EBITDA and capital expenditure.
- Strong 2017 financial performance
- Adjusted EBITDA of $14.8 billion, up 44%; Adjusted EBIT of $8.6 billion
- Net income attributable to equity holders of $5.8 billion
- Funds from operations of $11.6 billion, up 49%
- Recommended 2018 distributions of $2.9 billion ($0.20 per share), comfortably above the minimum $1 billion plus 25% of Industrial cash flows per company policy
- Marketing delivers again
- Marketing Adjusted EBIT of $3 billion, up 3% (up 10% like for like)
- Strong performances by Metals and minerals and Energy products segments, up 28% and 9% respectively
- Broadly consistent like-for-like contribution from Agricultural products in difficult market conditions
- Another strong unit cost/margin performance has boosted our Industrial earnings
- Industrial Adjusted EBITDA up 60% to $11.5 billion
- Mine cash costs/margins generally better year on year: Cu:86c/lb, Zinc: -16c/lb (10c/lb ex Au), Ni:191c/lb, Coal:$32/t margin
- Some emerging inflationary pressures and FX impacts more than offset by higher by-product credits
- Conviction to create value through partnerships, M&A and organic reinvestment
- Conservative financial policy underpins balance sheet strength and flexibility: Net debt of $10.7 billion within our $10 - $16 billion target range
- $1.6 billion invested in capital efficient growth (Volcan, Mutanda) offset by $1.0 billion of capital recycling through disposals (Trevali, HG Storage, BaseCore)
- HVO and Chevron South Africa announced in 2017, pending closure in 2018, subject to customary regulatory approvals
- 2017 expansionary capex of $1 billion, total industrial capex of $4 billion
- Creating sustainable long-term returns for shareholders
- The potential of synchronised global economic growth, emerging inflation, supportive commodity fundamentals and the emerging electric vehicle story suggest a positive outlook for commodities
- We believe the value of our unrivalled positioning and “Tier 1” asset and commodity diversification can create superior long-term value for all stakeholders
To view the full report please click here: http://www.glencore.com/assets/investors/doc/reports_and_results/2017/GLEN-2017-Preliminary-Results-final.pdf
For further information please contact:
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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.
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.