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GLN: 2022 Half Year Report
GLENCORE PLC
(Incorporated in Jersey under the Companies (Jersey) Law 1991)
(Registration number 107710)
JSE Share Code: GLN
LSE Share Code: GLEN
ISIN: JE00B4T3BW64
LEI: 2138002658CPO9NBH955
Baar, Switzerland
04 August 2022
NEWS RELEASE
2022 Half-Year Report
Highlights
Glencore’s Chief Executive Officer, Gary Nagle, commented:
“Notwithstanding what has clearly been a very complex environment for our markets, our operations, and the world in general, we
are pleased to report an exceptional financial performance for Glencore over the period.
“Global macroeconomic and geopolitical events during the half created extraordinary energy market dislocation, volatility, risk,
and supply disruption, resulting in record pricing for many coal and gas benchmarks and physical premia, underpinning a
$10.3 billion increase (119%) in Group Adjusted EBITDA to $18.9 billion. Marketing Adjusted EBIT more than doubled to $3.7 billion,
with energy products the standout, while Industrial Adjusted EBITDA increased $8.4 billion to $15.0 billion period-on-period.
“Allied to the record EBITDA, our net working capital significantly increased during the period, with some $5 billion invested into
Marketing, primarily Energy, in line with the materially higher oil, gas and coal prices, and their elevated volatilities. Despite this
build, significant cash was generated, which reduced Net debt to $2.3 billion, allowing for today’s announcement of $4.5 billion of
“top-up” shareholder returns, comprising a $1.45 billion special distribution ($0.11 per share) alongside a new $3.0 billion buyback
program (c.$0.23 per share). Today’s additional returns lift total 2022 shareholder returns to c.$8.5 billion.
“Looking ahead, tightening financial conditions and a deteriorating macroeconomic environment present some uncertainty for
commodity markets through the second half of the year. However, with few short-term solutions to rebalance global energy
markets, coal and LNG prices look set to remain elevated during this period, particularly given the current challenge of securing
sufficient and reliable energy supply for the Northern hemisphere winter ahead.
“For metals, the outlook is more complex, balancing supply risks, amid labour, water and energy shortages, supply chain
disruptions, growing sovereign risk uncertainty and rising costs, against likely weakening end-use markets ex-China. There are
some recent signs of China recovering from its Q2 trough, which could help to offset potentially weaker conditions in other key
consuming markets.
“The combined strength of our diversified business model across metals and energy industrial and marketing positions has proved
itself adept in all market conditions, which should allow us to both successfully navigate the shorter-term challenges that may
arise, as well as meet the resource needs of the future. I would like to thank all our employees for their efforts and tremendous
contribution during these turbulent times and as always, we remain focused on creating sustainable long-term value for all our
stakeholders.”
US$ million H1 2022 H1 2021 Change % 2021
Key statement of income and cash flows highlights1:
Revenue 134,435 93,805 43 203,751
Adjusted EBITDA? 18,918 8,654 119 21,323
Adjusted EBIT? 15,415 5,305 191 14,495
Income for the period attributable to equity holders 12,085 1,277 846 4,974
Earnings per share (Basic) (US$) 0.92 0.10 820 0.38
Funds from operations (FFO)2? 15,425 7,310 111 17,057
Cash generated by operating activities before working capital changes,
interest and tax 18,290 7,181 155 16,725
Glencore Half-Year Report 2022 1
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continued
US$ million 30.06.2022 31.12.2021 Change %
Key financial position highlights:
Total assets 139,955 127,510 10
Total equity 44,451 36,917 20
Net funding2,3? 27,987 30,837 (9)
Net debt2,3? 2,308 6,042 (62)
Ratios:
FFO to Net debt2,3,4? 1090.6% 282.3% 286
Net debt to Adjusted EBITDA3,4? 0.07 0.28 (75)
1 Refer to basis of presentation on page 6.
2 Refer to page 10.
3 Includes $585 million (2021: $857 million) of Marketing related lease liabilities.
4 H1 2022 ratios based on last 12 months’ FFO and Adjusted EBITDA, refer to APMs section for reconciliation.
? Adjusted measures referred to as Alternative performance measures (APMs) which are not defined or specified under the requirements of International Financial Reporting
Standards; refer to APMs section on page 67 for definitions and reconciliations and to note 3 of the financial statements for reconciliation of Adjusted EBIT/EBITDA.
ENERGY MARKET VOLATILITY AND HIGH PRICES DRIVE RECORD FIRST HALF EARNINGS
– Elevated energy market dislocation, volatility, risk and supply disruption, led to record prices for many coal and gas
benchmarks and physical premia, underpinning a $10.3 billion increase in Group Adjusted EBITDA to $18.9 billion
– Industrial Adjusted EBITDA increased $8.4 billion to $15.0 billion period-on-period, benefitting primarily from record coal
prices, augmented by the incremental 66.7% contribution from Cerrejón, acquired in January 2022
– Marketing Adjusted EBIT more than doubled to $3.7 billion, with energy products performing exceptionally well amid the
complex, volatile and elevated market risk backdrop, characterised by extreme dislocations and price movements
– We currently expect more normal Marketing conditions to prevail in the second half of the year
INDUSTRIAL UNIT COSTS HIGHER, PRIMARILY DUE TO THE BROAD INFLATIONARY ENVIRONMENT AND LOWER
BY-PRODUCT CREDITS
– H1 unit costs were: Copper 54¢/lb, zinc 9¢/lb (48¢/lb ex-gold), nickel (ex Koniambo) 370¢/lb and thermal coal $75.4/t
– Full year estimated unit costs: Copper 93¢/lb, zinc 29¢/lb (63¢/lb ex-gold), nickel (ex Koniambo) 359¢/lb and thermal coal
$79.4/t (all including updated by-product credits, as appropriate)
– H1 Industrial capex was $2.0 billion (H1 2021: $1.8 billion); full year guidance unchanged at $5.4 billion
INCOME FOR THE PERIOD ATTRIBUTABLE TO EQUITY HOLDERS OF $12.1 BILLION
– Including a $1.5 billion gain on acquiring the remaining 66.67% interest in Cerrejón and disposal of Ernest Henry
STRONG BALANCE SHEET
– Allied to the record EBITDA, our net working capital significantly increased during the period, with some $5 billion invested
into Marketing, primarily Energy, in line with the materially higher oil, gas and coal prices, and their elevated volatilities
– Despite the working capital build, significant cash was generated during the half, which reduced Net funding and Net debt
to $28.0 billion and $2.3 billion respectively from prior period levels of $30.8 billion and $6.0 billion.
– Period-end Net debt of $2.3 billion allows for “top-up” returns under our shareholder returns framework, where Net debt is
managed around a $10 billion cap, with sustainable deleveraging below the cap periodically returned to shareholders
– Announced today “top-up” shareholder returns of $4.5 billion, comprising a $1.45 billion special distribution ($0.11/share) and a
$3.0 billion share buyback (c.$0.23 per share)
– Total shareholder returns for 2022 of c.$8.5 billion, including the $3.4 billion base distribution and $0.6 billion buyback
announced in February 2022
– Spot illustrative free cash flow generation of c.$18 billion from Adjusted EBITDA of c.$32.3 billion.
To view the full report please click https://www.glencore.com/dam/jcr:507b9273-f06c-4362-970c-3a1c8be272d6/GLEN-2022-Half-
Year-Report.pdf
For further information please contact:
Investors
Martin Fewings t: +41 41 709 2880 m: +41 79 737 5642 martin.fewings@glencore.com
Media
Charles Watenphul t: +41 41 709 2462 m: +41 79 904 3320 charles.watenphul@glencore.com
www.glencore.com
Glencore Half-Year Report 2022 2
HIGHLIGHTS
continued
Please refer to the end of this document for disclaimers including on forward-looking statements.
Notes for Editors
Glencore is one of the world’s largest global diversified natural resource companies and a major producer and marketer of more
than 60 responsibly-sourced commodities that advance everyday life. Through a network of assets, customers and suppliers that
spans the globe, we produce, process, recycle, source, market and distribute the commodities that enable decarbonisation while
meeting the energy needs of today.
Glencore companies employ around 135,000 people, including contractors. With a strong footprint in over 35 countries in both
established and emerging regions for natural resources, our marketing and industrial activities are supported by a global network of
more than 40 offices.
Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation, battery manufacturing
and oil sectors. We also provide financing, logistics and other services to producers and consumers of commodities.
Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on
Mining and Metals. We are an active participant in the Extractive Industries Transparency Initiative.
Glencore recognises our responsibility to contribute to the global effort to achieve the goals of the Paris Agreement. Our ambition is
to be a net zero total emissions company by 2050. In August 2021, we increased our medium-term emission reduction target to a
50% reduction by 2035 on 2019 levels and introduced a new short-term target of a 15% reduction by 2026 on 2019 levels.
Important notice concerning disclaimers including on forward looking statements
This document contains statements that are, or may be deemed to be, “forward looking statements” which are prospective in
nature. These forward looking statements may be identified by the use of forward looking terminology, or the negative thereof such
as “outlook”, "plans", "expects" or "does not expect", "is expected", "continues", "assumes", "is subject to", "budget", "scheduled",
"estimates", "aims", "forecasts", "risks", "intends", "positioned", "predicts", "anticipates" or "does not anticipate", or "believes", or
variations of such words or comparable terminology and phrases or statements that certain actions, events or results "may", "could",
"should", “shall”, "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements are not based on historical
facts, but rather on current predictions, expectations, beliefs, opinions, plans, objectives, goals, intentions and projections about
future events, results of operations, prospects, financial condition and discussions of strategy.
By their nature, forward-looking statements involve known and unknown risks and uncertainties, many of which are beyond
Glencore’s control. Forward looking statements are not guarantees of future performance and may and often do differ materially
from actual results. Important factors that could cause these uncertainties include, but are not limited to, those disclosed in the last
published annual report and half-year report, both of which are freely available on Glencore’s website.
For example, our future revenues from our assets, projects or mines will be based, in part, on the market price of the commodity
products produced, which may vary significantly from current levels. These may materially affect the timing and feasibility of
particular developments. Other factors include (without limitation) the ability to produce and transport products profitably, demand
for our products, changes to the assumptions regarding the recoverable value of our tangible and intangible assets, the effect of
foreign currency exchange rates on market prices and operating costs, and actions by governmental authorities, such as changes in
taxation or regulation, and political uncertainty.
Neither Glencore nor any of its associates or directors, officers or advisers, provides any representation, assurance or guarantee that
the occurrence of the events expressed or implied in any forward-looking statements in this document will actually occur. You are
cautioned not to place undue reliance on these forward-looking statements which only speak as of the date of this document.
Except as required by applicable regulations or by law, Glencore is not under any obligation and Glencore and its affiliates expressly
disclaim any intention, obligation or undertaking, to update or revise any forward looking statements, whether as a result of new
information, future events or otherwise. This document shall not, under any circumstances, create any implication that there has
been no change in the business or affairs of Glencore since the date of this document or that the information contained herein is
correct as at any time subsequent to its date.
No statement in this document is intended as a profit forecast or a profit estimate and past performance cannot be relied on as a
guide to future performance. This document does not constitute or form part of any offer or invitation to sell or issue, or any
solicitation of any offer to purchase or subscribe for any securities.
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document,
“Glencore”, “Glencore group” and “Group” are used for convenience only where references are made to Glencore plc and its
subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship
between the companies. Likewise, the words “we”, “us” and “our” are also used to refer collectively to members of the Group or to
those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company
or companies.
Sponsor
Absa Corporate and Investment Bank, a division of Absa Bank Limited
Glencore Half-Year Report 2022 3
HIGHLIGHTS
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Glencore Half-Year Report 2022
Date: 04-08-2022 07:58:00
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