GlencoreXstrata CEO Ivan Glasenberg
JOHANNESBURG (miningweekly.com) – London-, Hong Kong- and now also Johannesburg-listed GlencoreXstrata on Tuesday lifted its final dividend beyond last year's, helped by a strong trading performance that offset mining decline and helped the company to beat its earnings forecast.
In its first set of full-year results since the merged group was formed and since its secondary listing on the JSE in November, the widely diversified mining and trading company reported adjusted earnings before interest, tax, depreciation and amortisation (Ebitda) of $13.1-billion, up on the $12.3-billion forecast.
"Our marketing division once again delivered a strong overall performance, while the modest year-on-year decline in our industrial asset performance inevitably reflected the weaker commodity price environment in 2013,” Glencore CEO Ivan Glasenberg commented.
Glencore's dividend yield of 3.2% lagged the 3.9% yield of BHP Billiton and Rio Tinto, London mining analyst company Liberum said, adding that its attraction lay in offering more exposure to copper than its diversified peers.
Glencore marketing did well across the board, London investment bank SP Angel said in a note.
"The dividend increase is a positive indicating management's intention to return cash when possible," said Investec Securities.
Mining Ebitda fell 4% to $10.5-billion within the lower commodity price environment that was alleviated by higher production, improved cost management and merger-linked synergies.
The board has recommended a final distribution of $0.111 a share, taking the full-year total to $0.165 a share, up 4.8% on 2012 and reflecting continued confidence in prospects.
Production growth was sturdy with copper output rising 26% to 1.5-million tons overall and African copper output rising up 43% as both Mutanda and Katanga each reached capacity of 200 000 t/y at year-end. Copper production growth at Collahuasi was 58%.
Ferrochrome production in South Africa rose 32% to 1.2-million tons on higher smelters and furnace utilisation and the successful commissioning of the Tswelopele pelletising plant.
Coal output rose 4% to 138.1-million tons on expansions at Prodeco and in Australian thermal coal.
Oil production began at the Alen oilfield, in Equatorial Guinea, and the Badila oilfield, in Chad.
The full benefit of the merger, which has already largely delivered sustainable yearly synergies of $2.4-billion, is expected in 2014, with the $0.3-billion implementation costs mostly incurred in 2013.
Net debt increased to $35.8-billion as completion of development projects, including McArthur River, African copper and the pre-commissioning of Koniambo, nears and capital expenditure enters a steeply declining trajectory.
Operating cash flow generation was slightly ahead of 2012 at $10.4-billion.