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Glencore: 'we've never been better placed'

Thursday, February 23, 2017 - 01:33

Miner-trader Glencore has reported an 18 percent increase in 2016 profits, buoyed by a rebound in commodities, and said the company had never been so well-positioned financially, meaning it was ready for small acquisitions or big dividends. Ivor Bennett reports.

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Sharing things on social media can be dangerous territory. But this is clearly something Glencore is happy to shout about. 2016 profits up 18 percent on the back of rising commodity prices, to 10.3 billion dollars. It's a dramatic turnaround compared to this time last year. When a rout on commodities had miners digging themselves out of a hole. A strike at Glencore's South Africa mine also added to difficulties. But in a webcast to shareholders, CEO Ivan Glasenberg said this had actually helped, by cutting production to boost prices. SOUNDBITE (English) IVAN GLASENBERG, CEO, GLENCORE, SAYING: "With all due respect, sometimes it's good to have these technical issues and sometimes it's good to have these strikes because it benefits the rest of your business. If you're a big enough player in that business." No matter how big the player is though, they're still dependent on Chinese demand. It's filling conveyor belts for now, but for how much longer? (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "The question of course will always be whether China is simply stockpiling raw materials or will continue to need them." According to Glasenberg, though, things have never been better. Suggesting the company may have some buying power after halving net debt over the last 18 months. (SOUNDBITE) (English) WILSON KING INVESTMENT MANAGEMENT, HEAD OF RESEARCH, RICHARD HUNTER, SAYING: "I suspect in terms of its recent past it may not be looking for acquisitions just at the moment as it gets to the point when it can finally tidy up its balance sheet." For shareholders though, there may be some reward. The board recommending a dividend of 7 cents a share after promising to reinstate payouts late last year.

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Glencore: 'we've never been better placed'

Thursday, February 23, 2017 - 01:33