Glencore sees earnings reach new highs in 2022

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Coal piled up at a thermal power plant in Berlin. Glencore says it benefited from large coal price moves last year. Keystone / Clemens Bilan

Profits at Swiss mining and trading group Glencore last year were boosted by the explosion in commodity prices. Thanks to a more than threefold increase in net profit, the Zug-based giant wants to double its shareholders’ remuneration, in particular through a share buyback.

“The unprecedented developments in global energy markets were material drivers for both our marketing and industrial businesses,” said CEO Gary Nagle in a statement on Wednesday, underlining the record profitability achieved by the group in the past financial year.

+ How the Ukraine war impacted Swiss commodities traders

According to unaudited figures, Glencore saw its revenues rise by 26% to $226 billion (CHF209 billion). Gross operating profit (Ebitda) jumped 60% to more than $34 billion, boosted by soaring coal prices and the additional contribution of two-thirds of the Colombian Cerrejón mine, acquired in January 2022.

“Russia’s invasion of Ukraine generated one of the largest dislocations in global energy markets in recent history,” Glencore wrote. “Most relevant to Glencore were the large coal price moves, where both high energy (NEWC) and low energy (API5) thermal coal markets jumped to record levels in 2022, with average prices up 163% and 112% respectively.”

Net profit attributable to shareholders more than tripled to a new record of $17.32 billion. Earnings per share (EPS) increased from $0.38 per share to $1.33 per share.

On the strength of these figures, Glencore said it would propose a dividend of $0.44 per share, as well as the launch of a $1.5 billion share buyback programme, bringing total shareholder remuneration to $0.56 per share, up from $0.26 a year earlier.

For the current financial year, Glencore’s management stressed the risk of high inflation rates and the resulting tightening of monetary conditions, but it expected demand to be supported by megatrends such as decarbonisation, electrification and energy security, without putting forward any quantitative targets.

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