Glencore’s Chief Executive Officer Ivan Glasenberg, commented on the company’s most-recent financial report.
“Our performance in 2019 reflected the prolonged and uncertain trade deal negotiations, generally weaker prices for our key commodities and some operational challenges experienced at our ramp-up/development assets. Adjusted EBITDA declined 26 per cent to $11.6 billion,” he said.
“Our Marketing business finished 2019 on a strong note, generating Adjusted EBIT of $2.4 billion, in line with 2018, with an excellent performance from oil and a stronger second half metals’ contribution, helping to offset the cobalt headwinds experienced in the first half.
“In relation to our ramp-up/development assets, performance is steadily improving, in particular at our flagship Katanga operation, which met its second half production targets for both copper and cobalt.
“We are again recommending to shareholders a 2020 base distribution of $0.20 per share, payable in two equal installments, which is comfortably covered (c.1.5x) by current annualised business free cash flow generation, even applying the presently weakened coronavirus discounted commodity prices.”
Mr Glasenberg commented on the company’s progress on its commitments to the transition to a low-carbon economy.
“We are on track to achieve a near doubling of our first GHG target with a reduction in Scope 1 and 2 emissions intensity of c.10 per cent since 2016,” he said. “Also, in line with our commitment to a Paris-consistent strategy, we project a c.30 per cent reduction in absolute Scope 3 emissions by 2035, including natural depletion of our coal and oil resource base over time.
“Looking ahead, in the short-term, we are closely watching coronavirus developments and potential scenario impacts on global growth and markets. As shown over many cycles, our business has various defensive cash flow characteristics, stemming primarily from marketing activities, but also material exposure to precious metals and infrastructure and expected countercyclical working capital inflows. Our priorities for 2020 remain being focused on delivering sustainable long-term returns for all stakeholders, including via delivering a step change in safety performance, realising the potential of our ramp-up assets, seizing further operational efficiencies, strengthening our balance sheet and managing the transition to Glencore’s next generation of leadership,” Mr Glasenberg concluded.
*Article published in the April-June 2020 issue of The Asia Miner