Glencore will give almost £6bn to shareholders after the mining and commodities company reported record pre-tax profits of more than £28bn in 2022, boosted by rocketing oil and coal prices.
The Switzerland-based group, whose market capitalisation makes it one of the largest FTSE 100 companies, announced a payout of £5.9bn ($7.1bn) to shareholders, including dividends and a new £1.2bn share buyback programme.
The announcement came as the miner’s adjusted pre-tax profit climbed 60% to a record £28.2bn last year, up £10.6bn on 2021.
Glencore’s trading division also reported record profits of £5.3bn, which represented a 73% increase compared with a year earlier and was mainly the result of soaring energy prices after Russia’s invasion of Ukraine.
These, said the company, were driven by its energy traders “successfully navigating the extreme market imbalances, volatility and dislocations across crude oil, LNG, refined products, coal and logistics infrastructure”.
Gary Nagle, Glencore’s chief executive, added that the company had been able to generate record profits as a result of soaring energy prices and “the generally high and volatile 2022 commodity price environment”.
Glencore said its industrial division’s profits had risen by 60% to £22.6bn as a result of significantly higher coal prices.
In January 2022 the company acquired the remaining two-thirds that it did not own of the Cerrejón mine in Colombia, South America’s largest open-pit coalmine.
However, Glencore sounded a note of caution over the economic outlook for the coming year, point to high levels of inflation around the world and the resulting hikes in interest rates as central banks attempt to tackle rising prices.
Despite this, the company expects to benefit from China’s decision to reopen its economy after abandoning its zero-Covid strategy.
Nagle said: “China’s reopening, however, together with a continued global focus on energy security and decarbonisation/electrification, mean that demand for many of our commodities is likely to remain healthy, while supply constraints persist and inventories remain relatively low.”
Glencore’s shares fell slightly during morning trading on Wednesday but were still almost 20% higher than their level a year earlier.
It was ordered by a London court last November to pay a record £281m in fines, confiscated profits and costs as punishment for bribery in Africa.
This was the largest ever financial penalty imposed on a company by a UK court and would have been higher had Glencore not received a one-third discount on the fine for pleading guilty to charges brought by the UK’s Serious Fraud Office.
The SFO said Glencore employees flew cash bribes to Africa in private jets and used “sham” documents to hide the true purposes of cash.
