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Glencore PLC GLEN

Rating as of

Morningstar’s Analysis

Valuation
Currency in GBX
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1-Star Price

PREMIUM

5-Star Price

PREMIUM

Economic Moat

PREMIUM

Capital Allocation

PREMIUM

Improved Net Debt and Higher Commodity Prices Sees Glencore Reinstate Dividends in 2021.

Analyst Note

| Mathew Hodge, CFA |

No-moat-rated Glencore’s 2020 adjusted net profit of USD 2.5 billion was slightly better than our forecast and the prior year’s USD 2.4 billion profit. Adjusted EBIT improved to USD 4.4 billion versus USD 4.2 billion in 2019. The better result reflected a stronger contribution from the marketing division where profit from trading commodities increased 41% to USD 3.3 billion. Mining EBIT fell to USD 1.1 billion from 1.8 billion a year ago. The swing primarily reflected the lower thermal coal price, but the lower metallurgical coal and oil prices also detracted. Glencore’s energy assets--coal and petroleum--swung from an EBIT profit of USD 1.3 billion in 2019 to a loss of USD 1.4 billion in 2020, mostly due to price.

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Company Profile

Business Description

Glencore is one of the world's largest commodities traders, active in markets for metals and minerals, energy products, and agricultural goods. The firm's marketing business provides sourcing, logistics, transportation, storage, and financing services to commodity producers and consumers around the globe. After the 2013 merger with diversified miner Xstrata, the company now ranks as one of the world's largest commodity producers in its own right. Core exposures are in the production of thermal coal, coking coal, copper, zinc, nickel and ferroalloys.

Contact
Baarermattstrasse 3, P.O. Box 1363
Baar, CH-6341, Jersey
T +41 417092000
Sector Basic Materials
Industry Other Industrial Metals & Mining
Most Recent Earnings
Fiscal Year End Dec 31, 2020
Stock Type
Employees 145,000

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