ZURICH: Glencore said Wednesday its net profits tumbled 41% in 2018, although the mining and commodity trading giant said operating profits rose to a record level and it announced a new US$2 billion plan to buy back shares.
Net profit fell to US$3.4 billion (3 billion euros), but the Switzerland-based firm said its measure of operating profit – adjusted earnings before interest, tax, depreciation and amortisation costs – rose by 8% to a record US$15.8 billion.
The firm’s commodity trading business saw its operating earnings fall by 17% to US$2.4 billion, but mining rose 15% to US$13.3 billion.
CEO Ivan Glasenberg said in the earnings statement that “we achieved these results in a challenging operating environment” and that Glencore’s strong cash generation would allow it to pay out roughly US$2.8 billion in dividends to shareholders.
He announced a new programme to buy back US$2 billion in shares this year, which he said could be increased depending on market conditions and progress on sales of non-core assets.
The earnings statement also showed that Glencore’s net debt rose by some US$3.5 billion to US$14.7 billion.
Glencore launched a massive cost-cutting drive in 2015 when its debt ballooned to almost US$30 billion in 2015 while commodity prices had tanked.
It scrapped dividends, closed operations and sold assets in an aggressive savings effort that stabilised the company’s finances.
A rebound in commodity prices helped Glencore post bumper profits in 2017 and pay out a healthy dividend to shareholders.