Glencore FY18 Profit Down 41%; Announces $2 Bln Share Buyback Program

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Glencore Plc. (GLCNF.PK, GLNCY.PK, GLEN.L) on Wednesday reported a 41 percent fall in fiscal 2018 net income to $3.41 billion from $5.78 billion last year. Earnings per share declined to $0.24 from $0.40 a year ago.

The decline in net income was mainly due to non-cash impairments at Mutanda and Mopani, totaling $1.4 billion, compared to $1.3 billion of accounting gains on sales of investments in the base period.

However, net income before significant items rose 5 percent from the year-ago period to $5.8 billion.

Funds from operations were $11.60 billion, up 2 percent from the prior year.

Adjusted EBITDA was $15.77 billion, an increase of 8 percent from $14.55 billion last year, primarily resulting from higher commodity prices and production increases, offset by cost inflation, lower grades for some by-products and reduced thirdparty smelting profitability.

Revenue for the year also increased to $219.75 billion from $205.48 billion in the previous year.

Looking ahead, Glencore said it's marketing EBIT guidance for 2019 is towards the middle of its $2.2 billion to $3.2 billion long-term range. The company said its full-year 2019 production guidance in all commodities is expected to be higher than 2018.

Glencore also said its board is recommending an aggregate distribution of $0.20 per share in respect of the 2018 financial year ended 31 December, payable in two equal instalments in 2019.

Glencore also announced a new $2 billion share buyback program, which will run until the end of 2019. The company said it will proactively look to top this up, in August, or otherwise, as market conditions support, including automatically from a targeted $1 billion of non-core asset disposals in 2019.

To meet the growing needs of a lower carbon economy, Glencore said it aims to prioritise its capital investment to grow production of commodities essential to the energy and mobility transition as well as to limit its coal production capacity broadly to current levels.