Glencore Returns to Profit on Commodities Boom -- Update

By Scott Patterson 

LONDON-- Glencore PLC swung into the black last year on surging commodity prices, an eye-popping recovery for the Swiss mining giant, which a year earlier reported billions of dollars in losses.

The U.K.-listed company on Thursday reported net income of $1.4 billion for 2016, compared with a $4.9 billion net loss the previous year. Revenue adjusted for discontinued operations rose to $152.9 billion from $147.4 billion a year earlier.

Glencore's earnings are the latest positive sign from the mining sector. BHP Billiton Ltd. and Anglo American PLC earlier this week also returned to profit, cashing in on higher commodity prices.

Glencore Chief Executive Ivan Glasenberg said stronger earnings and lower debt levels will give the company flexibility to either scoop up deals or return cash to shareholders.

"I don't think there's big stuff around to look at, but we'll see what opportunities come," he said on a conference call with reporters. "If we don't find big opportunities, we'll kick out big dividends."

Net debt fell to $15.5 billion by year-end from $25.9 billion at the end of 2015, below the lower end of the range of its guidance of $16.5 billion to $17.5 billion, as higher commodity prices, a dividend suspension and $4.7 billion in asset sales took pressure off the company's balance sheet.

Glencore said its trading business posted earnings before interest and taxes of $2.8 billion last year, a 14% gain from 2015, amid stronger demand, particularly from China, and drops in inventory levels.

It expects its trading group to report adjusted earnings in the range of $2.2 billion and $2.5 billion in 2017. That is lower than previous years' guidance of as much as $3.2 billion, due to its sale of half of its agriculture division last year.

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(END) Dow Jones Newswires

February 23, 2017 03:45 ET (08:45 GMT)

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