Glencore Share Discussion Threads

[adrian j boris] 08/8/2018 07:57

THANKS GX for FT ARTICLE

[ny boy] 08/8/2018 07:53

Agreed.

Solid going forward with the share price currently this low 326p is daft, looking at 400p + over the medium term

[gxgxx] 08/8/2018 07:53

A very good FT article


Glencore to focus on cutting debt, lifting shareholder returns
Miner and commodity trader reported jump in profits and sales in latest period
Mutanda copper and cobalt mine in the Democratic Republic of Congo. © Bloomberg


Glencore, miner and commodity trader run by Ivan Glasenberg, said it would focus on debt reduction and returning cash to shareholders as it announced a rise in profits and revenues in the latest half-year period.

The London-listed company, which is facing a US Department of Justice investigation into bribery and corruption, said it expected market conditions to remain volatile and expressed frustration with it share price.

“It is our view that our current equity price materially undervalues the business,” Mr Glasenberg said in a statement.

Shares in Glencore have fallen 16 per cent this year, underperforming its peers, which include Anglo American and BHP Billiton, as it has wrestled with a number of problems, chiefly in the Democratic Republic of Congo.

Last month, the highly acquisitive company announced a $1bn share buyback programme, which analysts said was an attempt to management to signal confidence in its business.

The buyback was launched just days after the company was ordered by the DOJ to hand over records related to its compliance with money-laundering laws in Nigeria, Venezuela and the DRC, where it has some of its most important assets.

In the six months to June, Glencore said adjusted earnings before interest, tax, depreciation and amortisation — the measure most closely tracked by analysts — rose 23 per cent to a record $8.3bn.

The result was slightly below market forecasts of $8.5bn, reflecting the fact that Glencore was not able to sell 32,000 tonnes of copper produced across its operations in the first half of the year. That position should reverse in the second half of the year, boosting EBITDA by $300m. Glencore also flagged higher sales and administrative costs.

Revenue was $108.5bn, against $100bn a year earlier, while Glencore reported net debt of $9bn, versus $10.7bn in the same period in 2017. Glencore said it would be co-operating with the DOJ.

“The 3 per cent miss to consensus forecasts and the increased cost guidance for 2018 is likely to be the focus of today’s results, but seasonality of production and copper sales as well as the magnitude of the impact from by-product credits within Glencore’s cost base are likely to see full-year consensus estimates relatively unchanged,” said Tyler Broda, analyst at RBC Capital Markets.

Glencore said its trading, or marketing arm, generated adjusted ebitda $1.6bn, up from $1.46bn a year ago, meanwhile its mining assets reported ebitda of $6.7bn, up from $5.28bn

Glencore said the strong performance of its mining assets reflected higher prices, the ramp up of its Katanga copper mine in the DRC, partially offset by some cost pressures.

Glencore is the third of the big miners to report results after Anglo American and Rio Tinto. They also reported big profits but while Rio announced plans to return more than $7bn to shareholders and flagged rising costs pressure. Anglo said it wanted to reduce debt further and approved a $5.5bn copper project in southern Peru.

“While broader market conditions are likely to remain volatile, confidence in our business prospects and current share trading levels point to near-term focus on deleveraging and shareholder returns/buybacks funded through cash generation,” said Mr Glasenberg.

[purplepanther] 08/8/2018 07:33

And their view on their own share price ..."In addition, an up to $1 billion share buy-back programme running until 31 December 2018 was announced on 5 July. It is our view that our current equity price materially undervalues the business. As of 3 August 2018, GBP350 million of shares had been purchased under this programme."

[purplepanther] 08/8/2018 07:28

Solid outlook statement with annualised adjusted EBITDA of $17.7bn at current spot commodity prices and no sign of deterioration in demand growth.


IMO that’s the important number because any recovery in commodity prices and the EV/EBITDA value rapidly falls sub the 4x it’s already on

[gutterhead] 08/8/2018 07:24

good results but looks like the city was expecting more-will be interesting to see reaction

[florenceorbis] 08/8/2018 07:07

Miners Spend on Shareholders, Not Projects
07/08/2018 6:35pm
Dow Jones News

Glencore (LSE:GLEN)
Intraday Stock Chart

Today : Wednesday 8 August 2018
Click Here for more Glencore Charts.

By Rhiannon Hoyle in Sydney and Scott Patterson in London

The world's largest mining companies are spending big again, but it isn't on new pits or megadeals.

Companies including Rio Tinto PLC and Glencore PLC are throwing off billions of dollars to shareholders via dividends and share buybacks, making good on a pledge to increase payouts as they dig their way out of a steep market slump. Yet executives have recently been forced to defend the payouts, amid worries that they are sacrificing opportunities for growth -- such as building mines or doing deals.

"We fully acknowledge [in] the mining business you need to grow, because depletion is a reality," said Rio Tinto Chief Executive Jean-Sébastien Jacques. Still, he said Rio Tinto wasn't under any immediate pressure to invest more heavily.

Rio Tinto, the world's second-biggest miner by market value, last week said it was spending $7.2 billion on shareholder returns, including a record dividend, as it reported a 33% rise in first-half net profit. That compared with a $2.4 billion budget for big projects.

Iron-ore giant Vale SA, after also reporting a jump in first-half underlying earnings, said it would give shareholders $2.1 billion in dividends and buy back shares worth $1 billion. Vale, which recorded second-quarter capital expenditures at the lowest level in 13 years, said buying shares "is one of the best investments for its excess cash."

The windfalls for investors have led mining companies to rank among the best-performing stocks globally. Rio Tinto's Australia-listed shares have risen more than 50% over the past two years, sharply outpacing gains by the benchmark index. BHP Billiton Ltd.'s value has jumped by two-thirds over the same period.

In 2017, BHP, Rio Tinto, Glencore, Vale and Anglo American PLC showered investors with dividends worth over 50% more than the prior year, according to S&P Global Ratings. It forecasts even fatter returns in the years ahead.

While payouts have risen, capital spending has dropped to $48.3 billion in 2017 from a peak of $150.1 billion in 2012, according to commodities consultancy Wood Mackenzie. That could fall further over the next few years if more projects aren't approved.

For Glencore, which is due to report earnings on Wednesday, miners' conservatism is long overdue. The company was critical of the heavy investment made by Rio Tinto, BHP and others in commodities such as iron ore during the last boom because it resulted in a glut of new supply that ultimately drove down prices and industry profits. The spending spree also stretched mining-company balance sheets, forcing several midsize U.S. companies to seek bankruptcy protection.

The world's 50 biggest mining companies spent about $1 trillion on projects during the last 20-year commodity cycle that started in the late 1990s, as they scrambled to feed China's industrialization and support economic growth in the U.S. and elsewhere, according to Sanford C. Bernstein.

Glencore -- forecast to post an almost 30% rise in net income of $3.2 billion for the first half of the year -- has balanced buying back shares with deals for existing assets from Africa to Australia. Last month, the Swiss-based company said it would purchase $1 billion in stock from investors. That buyback was announced days after disclosing it had received a subpoena from U.S. authorities related to compliance with corruption and money-laundering laws at its operations in the Democratic Republic of Congo, Nigeria and Venezuela.

Heightened regulatory scrutiny and resurgent resource nationalism have played a part in big miners exiting projects in many developing countries that management had once touted as critical to their growth. Rio Tinto last month signed an initial deal to sell its stake in Grasberg, the world's second-largest copper mine, in Indonesia.

Jefferies LLC said the outlook is murky for aggressive expansion. An escalating conflict between the U.S. and China is threatening global trade and could stunt commodity demand if it leads to a downturn in economic growth. The firm Wood Mackenzie projects spending of just $23.1 billion in 2020, which would be the lowest in at least a decade.

Still, there are signs that some mining executives are starting to bring forward new projects, particularly focusing on metals and minerals that can feed new technologies such as lithium-ion batteries and electric cars.

Anglo American last month outlined plans for a giant $5 billion copper project in Peru and almost doubled its first-half capital expenditures to $1.2 billion, compared with a $630 million interim dividend. Rio Tinto is building a bauxite pit in Australia and an underground copper mine in Mongolia.

Wood Mackenzie analyst Michael Sinden said those investments don't go far enough. It can take five to 10 years for new mines to start up, so companies risk being unable to capitalize on any sudden rally in commodity prices. Many of the world's biggest pits have been operating for decades and existing ore sources risk becoming tapped out. A supply shortfall would then pose a worrisome challenge to commodity users as higher prices mean bigger costs.

Write to Rhiannon Hoyle at [e-mail] and Scott Patterson at [e-mail]



(END) Dow Jones Newswires

August 07, 2018 13:20 ET (17:20 GMT)

[florenceorbis] 08/8/2018 07:02

Baar, 8 August 2018

2018 Half-Year Report

To view the full report please click here:



Highlights

Glencore's Chief Executive Officer, Ivan Glasenberg, commented: "The strength of our diversified business model and commodity mix is once again demonstrated with a 13% increase in net income and a 23% increase in Adjusted EBITDA to $8.3 billion.

"Against a volatile but favourable trading and commodity price environment, Marketing performed towards the upper end of its guidance range with a 12% increase in Adjusted EBIT to $1.5 billion. Our Industrial business recorded Adjusted EBITDA of $6.7 billion, up 26%, reflecting the highly competitive cost positions of our asset base.

"Cash generation remains strong, with FFO up 8% to $5.6 billion and our balance sheet healthy, with Net debt of $9 billion. In addition to the $2.85 billion of shareholder distributions announced earlier this year, we recently announced a $1 billion buy-back programme.

"While broader market conditions are likely to remain volatile, confidence in our business prospects and current share trading levels point to near-term focus on deleveraging and shareholder returns / buybacks funded through cash generation. We remain focused on creating value for shareholders through the disciplined allocation of long-term capital."

[gutterhead] 07/8/2018 20:38

Good luck all

[ny boy] 07/8/2018 18:22

I guess a few in the know today, virtually at the day’s highs,at the close, bodes well many are staying in for the ride.

[losses] 07/8/2018 18:22

Everything crossed here lol

[swedeee] 07/8/2018 17:24

fingers crossed for tomorrow

[waldron] 07/8/2018 17:11

Rio Tinto
3,962 +0.99%


BHP Billiton
1,724.6 +2.23%


Anglo American
1,736.2 +3.47%



Glencore
326.3 +3.92%



Gold COMEX 1,220.60 +0.41%
Silver COMEX 15.41 +0.72%
Copper COMEX 2.76 +1.19%
Brent Crude Oil NYMEX 74.36 +0.95%

[joeall] 07/8/2018 12:03

I'm very pleased to date,with the amount I have made trading this share.
It's the only share I have ever traded.6£ a trade and no tax.

[twixy] 07/8/2018 11:56

This one does :-)

[purplepanther] 07/8/2018 11:36

Agree to that Waldron, Glencore a real mis-valuation, esp on free cash flow yields.Remarkable few want to buy when commodity prices falling like yesterday, and then as it reverses everyone wants to chase it. I do wonder if any of the fools trading this ever sustainably make money

[waldron] 07/8/2018 10:32

PP PUZZLED

I DID READ ARTICLE AND THANKED YOU FOR IT



NO QUESTION AS TO SUBSTANTIAL FREE CASHFLOW TODAY

IT WILL BE INTERESTING TO SEE WHAT USE IT WILL BE PUT FOR FUTURE YEARS


IMO AND NO DOUBT YOURS

GLEN IS SUBSTANTIALLY UNDERVALUED

[purplepanther] 07/8/2018 10:20

I'd encourage you to google the Bloomberg article Waldron was it has quite an interesting chart of half yearly EBiTDA Glencore has made since 2011, and it's quite remarkable how much money this company has made in such a short period of time - comfortably more than its entire market cap !

[ny boy] 07/8/2018 09:19

Aye 400p magnet approaching

[waldron] 07/8/2018 08:30

TODAY Glen sits still snug in the 310 to 340p BOX

TOMORROW IF NO DISAPPOINTMENTS SHOULD SEE A SPIKE UP IMO


340 to 370p BOX entered with ease

[waldron] 07/8/2018 08:25

Pellet Test Announcement
Tue, 7th Aug 2018 07:00

RNS Number : 9314W
Zanaga Iron Ore Company Ltd
07 August 2018
Â

7 August 2018

Â

POSITIVE PELLET TEST RESULTS

Â

Zanaga Iron Ore Company ("ZIOC" or the "Company") (AIM:ZIOC) is pleased to announce positive pellet test results from recent test work.

On 30 June 2018 ZIOC announced the significant progress made in the Zanaga Iron Ore Project's pelletisation test work programme aimed at producing an industry acceptable iron ore pellet product using a lower cost cold pelletisation process. The results showed that the most recent batches of Zanaga cold pellets had met all industry standard tests as determined by independent third party laboratories.

Test work was then commissioned with the intention of ascertaining commercial acceptability in the steel production process. Two further 20kg samples of Zanaga cold pellets were sent to a European steel mill as well as an accredited European laboratory servicing the steel industry.

ZIOC is pleased to confirm that the tests conducted by these independent laboratories have returned positive results within the industry acceptable limits for conventional pellets.

These tests were undertaken by Jumelles, the joint venture between the Company and Glencore, as part of the overall initiative to establish the viability of an Early Production Project (EPP) as described in the Company's Annual Report of 30 June 2018. As part of the ongoing work-streams, discussions are taking place with steel mills globally to consider further steps and tests that need to be taken in order to assess potential demand and pricing for Zanaga pellets and pellet feed concentrate.

Clifford Elphick, Non-Executive Chairman of ZIOC, commented:

"The positive results from recent pellet tests with a leading steel mill and an accredited independent European laboratory, servicing the steel industry, are encouraging indicators of the potential for Zanaga to produce a commercially accepted pellet product with high iron content and low impurities"

[manics] 07/8/2018 08:17

What chance a little rise today ready to crater it on the open tomorrow?

[waldron] 07/8/2018 07:18

cheers PP
ENJOY YOUR DAY
AWAIT TOMORROW WITH POSITIVE ANTICIPATION
8 August 2018 Glencore Half-Year Results

Glencore has favored building a war chest for deals in recent years rather than giving money back to shareholders. Yet last month, just days after being hit by the U.S. probe, it announced it was buying back $1 billion of shares. The repurchase amount could be increased this week, Liberum and Macquarie Group Ltd. suggested.

“I expect an increase in the buyback but management might be reticent, especially if they want the firepower to go out and do other things,” said Davis from Liberum.

[purplepanther] 07/8/2018 01:56

from Bloomberg -


Glencore's Poised for Record Profit Despite Horrible Year

Glencore Plc may have had a nightmarish year so far, but the world’s top commodity trader is still raking in mountains of money.

The company is facing a U.S. corruption probe, got mired in a dispute with its billionaire former partner in the Democratic Republic of Congo and has been caught in the fallout from new U.S. sanctions on Russia -- among other issues. Yet despite all the bad news, Glencore is expected to report its most profitable six months ever when the company publishes first-half results Wednesday.

While some of the issues have since been resolved, the company’s shares are down about 20 percent this year, compared with gains by rivals like BHP Billiton Ltd. and Anglo American Plc. Analysts are more optimistic, meaning that Glencore’s share discount to the average target price is near its widest in half a decade.

“Glencore has always had reputational issues, but even by their standards this has been a particularly horrific six months,” said Ben Davis, an analyst at Liberum Capital Ltd. “Glencore is showing that it’s a riskier beast than its rivals and it trades at a discount because of that.”

Despite all that, Glencore is expected to report adjusted earnings before interest, taxes, depreciation and amortization of about $8.5 billion in the first half, its biggest ever.

Those earnings are likely to be driven by bumper profits from coal -- Glencore is the world’s biggest shipper -- where prices have surged, along with increased copper and cobalt production. The company has already forecast that profits from its hallowed trading business will be close to an all-time high.

Glencore is the last of the big miners to report first-half earnings -- BHP Billiton runs on a different financial calendar and will post full-year results later this month -- with Rio Tinto Group and Anglo already reporting big profits. The companies’ use of extra cash has diverged, with Rio saying it would funnel $7 billion back to shareholders, while Anglo approved a $5 billion new copper mine.

Glencore has favored building a war chest for deals in recent years rather than giving money back to shareholders. Yet last month, just days after being hit by the U.S. probe, it announced it was buying back $1 billion of shares. The repurchase amount could be increased this week, Liberum and Macquarie Group Ltd. suggested.

“I expect an increase in the buyback but management might be reticent, especially if they want the firepower to go out and do other things,” said Davis from Liberum.