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FTSE 100: Glencore announces £5.8bn payout to shareholders after record profit

Ore processing, smelting and pelletizing plant seen from above on a sunny day
Mining company Glencore's core profits have increased by 60%, reaching an historic high of $34.1bn (£28bn). Photo: Getty (Anton Opperman via Getty Images)

Glencore has announced a £5.8bn ($7.1bn) payout to shareholders after posting "record profits" in its full year 2022 results, powered by its coal and trading divisions.

Revenue for the Swiss-based mining multinational came in at $255.9bn in 2022, has a surge of 26% from the year previous.

The miner will now hand out over £5.8bn to shareholders in dividends and buybacks after posting another period of increased revenue and profits.

Glencore's core profits have increased by 60%, reaching an historic high of $34.1bn (£28bn). This figure includes $18.6bn (£14.89bn) generated by the energy business, which comprises coal.

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Glencore took full ownership of the Cerrejón coal mine in Colombia in early 2022. Purchasing BHP and Anglo American stake in the open-cut mine. The sale marked Anglo American’s exit from the thermal coal market.

Read more: What are share repurchases?

Glencore shares (GLEN.L) fell 2.15% in early trading in London on Wednesday, priced at 504p as of the time of writing.

In the full year results for 2022, released on Wednesday, Glencore’s chief executive officer, Gary Nagle, said: “The global pandemic, recovery from it and years of underinvestment, followed by conflict in Europe, exposed pre-existing vulnerabilities in energy security and supply chains, underpinning the generally high and volatile 2022 commodity price environment, which enabled the Group to generate record profitability for the year.

”The unprecedented developments in global energy markets were material drivers for both our marketing and industrial businesses, lifting Group Adjusted EBITDA to $34.1bn, up from $12.8bn over the period."

EBITDA is an acronym that combines a company's net income earnings with interest, taxes, depreciation, and amortisation added back in.

Nagle added: "Marketing posted another record performance, with Adjusted EBIT of $6.4bn, up 73% year on year, driven primarily by our energy departments successfully navigating the extreme market imbalances, volatility and dislocations across crude oil, LNG, refined products, coal and logistics infrastructure.

Read more: FTSE 100 opens lower as inflation remains in double digits and Barclays disappoints

"Industrial EBITDA increased by $10.2bn to $27.3 billion, benefitting primarily from record prices for our key coal benchmarks, amplified by the incremental contribution from the two-thirds of Cerrejón, acquired in January 2022, that Glencore did not previously own."

The outlook for 2023 for the multinational commodity trading and mining company forecasts risks associated with higher inflation rates and the tightening of monetary policy from central banks.

However, China’s reopening is projected as increasing demand for Glencore commodities.

Glencore produce and market a wide range of metals and minerals such as copper, cobalt, zinc, nickel and ferroalloys, they also market aluminium/alumina and iron ore from third parties.

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