Glencore share price: Miner updates investors on FY performance

Company posts adjusted EBITDA of $10.3 billion, up 18%

Glencore share price: Miner updates investors on FY performance

Glencore (LON:GLEN) has updated investors on its recent performance this morning.

Highlights from the company statement:

· Strong 2016 financial performance in challenging market conditions

- Adjusted EBITDA of $10.3 billion, up 18%; Adjusted EBIT of $3.9 billion, up 81%

- Net income pre-significant items of $2 billion, up 48%

- Funds from operations of $7.8 billion, up 17%

- Capital expenditure of $3.5 billion, down 41%

· Underpinned by outstanding cost performance …

- Full year operational unit cost performance in our key commodities: copper 87c/lb, zinc -5c/lb (16c/lb ex gold), nickel 265c/lb and thermal coal $39/t at a $18/t margin

- Significant reductions in copper and zinc cost structure expected to be sustained into 2017

· … and the resilience of the marketing business

- Marketing Adjusted EBIT of $2.8 billion, up 14%, supported by improved demand conditions

- Strong H2 2016 contribution from all 3 segments

· Capital structure repositioned

- Net funding reduced by $14.7 billion over the past eighteen months to $32.6 billion (Net Debt $15.5 billion)

- Cash flow coverage ratios improved to strong investment grade levels

§ FFO to Net debt: 50%

§ Net debt to Adjusted EBITDA: 1.5x

- Available committed liquidity of $16.7 billion

- Achievement and maintenance of strong Baa/BBB credit ratings remains a top priority

- Optimised capital structure ensures less risk, more flexibility and stability of distributions

· Positioned for the challenges and opportunities that lie ahead

- Uniquely diversified by commodity and geography

§ Major low-cost supply positions in copper, zinc, nickel, coal, cobalt and ferroalloys

- Favourable fundamentals for our key commodities - already in deficit or transitioning to deficit

§ Modest total capex guidance of c.$4 billion per annum going forward (includes c.$3 billion of sustaining capex) - no greenfields

- Substantial volumes of low-cost capacity that can be restarted as and when appropriate

- Fixed plus variable distribution policy effective from 2018 that leverages the resilience of marketing cash flows, while providing upside to commodity prices. $1 billion distribution recommended for 2017

- Strong investment grade balance sheet that offers headroom for highly selective growth opportunities

- Annualised free cash flow of $6.9 billion at current spot prices, based on spot annualised Adjusted EBITDA of $14.6 billion

As of 07:25 GMT, Thursday, 23 February, Glencore Xstrata PLC share price is 325.87p.

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