Glencore nets $5B last year as demand for commodities soared
GENEVA (AP) — Swiss-based minerals and mining giant Glencore on Tuesday reported $5 billion in net profits in 2021, bouncing back from an annual loss a year earlier and citing an “extraordinary year” where demand shot up for metals and energy products.
The company also said it has set aside $1.5 billion to deal with bribery and corruption investigations in Brazil, Britain and the United States.
The diversified company, based in Baar, Switzerland, hailed a strong backdrop for commodities and suggested it was poised to help the transition toward an economy with net zero carbon emissions even as it benefited from a strong surge in the prices of products like coal, a key contributor to global warming.
“Looking forward, we remain focused on our strategy to enable and deliver decarbonization and meet the increasing demand for everyday metals, while responsibly meeting the energy needs of today,” CEO Gary Nagle said in a statement.
“We look to the future confident that we have the right pathway to succeed in a net zero economy and create sustainable long-term value for all stakeholders, while operating in a responsible manner across all aspects of our business,” he added.
Glencore cited several emissions-cutting targets, including a 15% reduction by 2026 and ambitions for net zero emissions by 2050, pointing to its plans for a “responsible decline of our coal portfolio.”
The company said net earnings attributable to equity holders came in at $5 billion last year, compared with a net loss of $1.9 billion in 2020. Annual revenue jumped 43%, to $203.8 billion.
Glencore cited strong performance across all its commodity departments last year and noted double-digit percentage increases in the annual prices for key products like cobalt, copper, nickel, zinc and one type of coal, which alone saw average prices jump 125%.
The company’s products have a vast array of uses in industries like cars, battery production, construction, electronics, energy and steel.
Glencore noted two outstanding corruption investigations in the United States as well as bribery probes in Brazil and Britain, in addition to an investigation by the Swiss attorney general’s office into whether the company lacked proper organizational measures to prevent alleged corruption.
“The company presently expects to resolve the U.S., UK and Brazilian investigations in 2022,” Glencore said.
It added that it has raised a provision as of year-end 2021 of $1.5 billion, representing its “current best estimate of the costs to resolve these investigations.”
Glencore said its improved financial position — which once teetered on bankruptcy — had shrunk net debt to $6 billion. It announced a total of $4 billion in shareholder returns, mostly through a base distribution but also a $550 million buyback.