Glencore Plc said in a statement today that it has decided to hold a $1-billion share buyback program after its profit over the first six months of the fiscal year increased by 8% due to higher production of copper, coal and oil, and strong performance of the companys marketing arm.
According to Glencores statement, the companys adjusted net income increased from $1.9 billion over the same period a year ago to $2.01 billion. The first-half result of the company outstripped analysts initial projections of $1.93 billion.
The Chief Executive Officer of the company – Mr. Ivan Glasenberg said in an interview, which was cited by the Wall Street Journal: “We look to the future with optimism based on our strong starting point and our culture of entrepreneurialism and hard work to leverage tightening commodity fundamentals.”
As reported by Bloomberg, Mr. Glasenberg also shared: “The supercycle ain’t over, China is still buying, demand for commodities hasn’t tapered off, it’s even higher than it’s ever been. The demand is pretty good. We’ll grow. We may do acquisitions where you’re not creating more supply in the market.”
Global mining companies have been put under increasing pressure from shareholders to raise returns and trim spending on new projects and expansions after years of bad acquisitions, slow growth and poor returns.
Mr Glasenberg said that Glencores sale of the Peruvian copper mine Las Bambas for $6.5 billion allowed the U.K. company to boost its balance sheet and launch the share buyback.
Glencores repurchased shares are intended to be initially kept in treasury, which is why they will not increase the companys earnings per share. Still, they could be used for takeovers and expansions.
Glencore Plc added 0.32% to trade at 360.10 pence per share by 9:07 GMT, marking a one year change of +21.18%. The company is valued at 47.98 billion pounds.
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