Home Stocks Glencore Ready for Graft Problems

Glencore Ready for Graft Problems

by S. Jack Heffernan Ph.D

Mining and commodities trading giant Glencore said Tuesday it set aside $1.5 billion as it expects to resolve corruption investigations in the United States, Britain and Brazil this year.

The Switzerland-based company made the announcement in a company results statement showing that it returned to profit last year, pulled up by higher commodity prices after a loss when the Covid pandemic emerged in 2020.

Glencore disclosed in 2018 that the US Justice Department had launched a corruption investigation linked to the group’s business in Nigeria, Venezuela and the Democratic Republic of Congo.

A year later, the UK’s Serious Fraud Office said it was investigating suspicions of bribery by the Glencore group of companies and staff.

Brazil also opened a probe in 2018 into Glencore and trading groups Vitol and Trafigura over alleged bribery of employees at state-run oil company Petrobras.

“Glencore has been cooperating extensively with the various authorities in order to resolve these investigations as expeditiously as possible,” the company said.

“While Glencore cannot forecast with certainty the cost, extent, timing or terms of the outcomes of the investigations, the Company presently expects to resolve the US, UK and Brazilian investigations in 2022,” it added.

While Glencore eyes an end to its legal troubles, the company posted a net profit of nearly $5 billion (4.4 billion euros) for 2021 after a loss of $1.9 billion the previous year.

Glencore said its strong result especially reflected surging demand and prices for its metals and energy products, which had seen its pre-tax earnings jump 118 percent to $17.1 billion.

“In spite of the ongoing challenges of Covid-19, 2021 was an extraordinary year for Glencore,” company chief executive Gary Nagle said in a statement.

The company’s earnings on metals alone ticked in at $12 billion — soaring 65 percent from a year earlier — while earnings in its energy unit rose fivefold to $5.6 billion.

The company, which has long been struggling to bring down towering debt, said it had made good progress in 2021, more than halving its debt load to $6 billion.

Glencore launched a massive cost-cutting drive in 2015 when its debt ballooned to almost $30 billion as commodity prices had tanked.

On Tuesday, Glencore said it would dish out $4 billion to its shareholders as it more than doubled the dividend to $0.26 per share.

In addition, it launched a new $550-million share buyback programme.

You may also like


Your Trusted Source for Capital Markets & Related News

© 2023 LiveTradingNews.com – For The Traders, By The Traders – All Right Reserved.

The information contained on this website shall not be construed as (i) an offer to purchase or sell, or the solicitation of an offer to purchase or sell, any securities or services, (ii) investment, legal, business or tax advice or an offer to provide such advice, or (iii) a basis for making any investment decision. An offering may only be made upon a qualified investor’s receipt not via this website of formal materials from the Knightsbridge an offering memorandum and subscription documentation (“offering materials”). In the case of any inconsistency between the information on this website and any such offering materials, the offering materials shall control. Securities shall not be offered or sold in any jurisdiction in which such offer or sale would be unlawful unless the requirements of the applicable laws of such jurisdiction have been satisfied. Any decision to invest in securities must be based solely upon the information set forth in the applicable offering materials, which should be read carefully by qualified investors prior to investing. An investment with Knightsbridge is not suitable or desirable for all investors; investors may lose all or a portion of the capital invested. Investors may be required to bear the financial risks of an investment for an indefinite period of time. Qualified investors are urged to consult with their own legal, financial and tax advisors before making any investment. Knightsbridge is a private investment firm that offers investment services to Qualified Investors, Members and Institutions ONLY. Qualified Investors are defined as individuals who have met those Qualifications in the relevant jurisdictions. Members are defined as individuals who have been accepted into the Knightsbridge membership program. Institutions are defined as entities such as banks, pension funds, and hedge funds. If you are not a Qualified Investor, Member or Institution, you are not eligible to invest with Knightsbridge. All investments involve risk, and there is no guarantee of profit. You may lose some or all of your investment. Past performance is not indicative of future results. Knightsbridge is not a registered investment advisor, and this disclaimer should not be construed as investment advice. Please consult with a qualified financial advisor before making any investment decisions. By accessing this website, you agree to the terms of this disclaimer. Thank you for your interest in Knightsbridge.