Glencore 2021 Profit Nearly Doubles

Mining and commodities trader Glencore (LON: GLEN) announced Tuesday preliminary results for 2021. The mining and commodities trader posted its highest ever profit thanks to soaring commodity prices.

Strong Financial Performance

The Swiss company posted an adjusted EBIDTA of $21.3 billion in 2021, nearly double from a year earlier.

Glencore’s profits in metals alone reached $12 billion, a 65% increase from the previous year, while profits in its energy unit rose fivefold to $5.6 billion.

Net profit, pre-significant items, was $9.1 billion, up 2675, while net income attributable to shareholders was $5 billion, compared to a loss of $1.9 billion in 2020.

The company will set aside $1.5 billion to cover a series of corruption and market manipulation investigations, which it expects to solve before the end of the year.

CEO Commentary

Glencore CEO Gary Nagle said, “In spite of the ongoing challenges of Covid-19, 2021 was an extraordinary year for Glencore, reflecting rising demand for our metals and energy products, record Adjusted EBITDA and the transition to new leadership.”

“The significant improvement in the Group’s financial results has driven Net debt down to $6.0 billion, allowing for today’s announcement of $4.0 billion of shareholder returns, comprising a recommended $3.4 billion ($0.26 per share) base distribution (in respect of 2021 cash flows), alongside a $550 million share new buyback (c.$0.04 per share) programme.”

Wall Street’s Take

Two days ago, RBC Capital analyst Tyler Broda kept a Buy rating on GLEN with a 550p price target. This implies 29.1% upside potential.

The rest of the Street is bullish about GLEN, with a Strong Buy consensus rating based on 10 Buys and one Hold. The average Glencore price target of 450.91p implies 5.8% upside potential to current levels. 

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