The markets were not impressed yesterday with Glencore’s pitch that its first-half results represented healthy earnings in the face of “a normalisation of commodity market imbalances and volatility” — management-speak for a collapse in metals and minerals prices from last year’s elevated levels.
It is a stark reminder of how far Glencore, like other miners, is exposed to so many factors outside its control. Added to the price falls was an inflation-induced squeeze on costs. That took net income down 62 per cent to $4.2 billion. Cash from operating activities was down nearly $10 billion to $8.4 billion.
But the pill was sweetened by shareholder distributions and buybacks boosted from $2.2 billion to $5.2 billion, including a $1 billion special dividend. A $1.2 billion share
