Glencore unveils $1bn buyback as first-half profits rise
- Interim dividend up 11%, $1bn buyback announced
- Adjusted EBITDA up 8%
- Marketing division drives profit growth
Mining and trading giant Glencore reported an 11% increase in its interim dividend and unveiled a $1bn share buyback after profits rose in the first half of 2014.
The company said that results were helped by marketing growth, production expansion and synergies from last year's merger with Xstrata and the 2012 acquisition of Viterra.
Adjusted earnings before interest, tax, depreciation and amortisation (EBITDA) totalled $6.5bn in the six months to 30 June, up 8% over the year before.
The company saw a 23% jump in adjusted operating profits at the smaller marketing division to $1.6bn, while industrial adjusted operating profits rose by just 3% to $4.8bn.
Production was mixed across the group's commodity classes during the first half, though output of copper and coal - its biggest contributors to profit - rose 13% and 5% year-on-year, respectively. Ferrochrome and oil production also rose, but declines were seen in zinc and nickel.
Revenues across the group totalled $114bn, up from $112bn in the first half last year.
Net debt by 30 June stood at $37.6bn, up from $35.8bn at the end of 2013.
Since the half-year mark, Glencore completed the $6.5bn sale of its Las Bambas copper mine in Peru, as well as the $1.6bn acquisition of oil partner Caracal. After adjusted for these transactions, net debt was $32.6bn.
The interim dividend was raised to 6.0 cents a share, up from 5.4 cents the year before.
Meanwhile, it said it would return $1bn of capital to shareholders over the next six months by way of a share repurchase programme.
"These steps are in line with our prudent capital allocation and balance sheet policies set out in May 2013, following the Xstrata acquisition," said chief executive Ivan Glasenberg.
"The successful divestment of Las Bambas has improved our balance sheet to a position that now allows us to accelerate the return of excess capital to shareholders," he said.
BC