Glencore PLC (GLEN.L, Financial) reported a growth of 23% in adjusted earnings and a 13% increase in the bottom line, according to financial results released today. The results reflected the company's performance over the first six months of the year.
The adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda, was reported at $8.3 billion. In its income statement, the company reflected net earnings of nearly $2.8 million.
The company has a diversified portfolio of activities that include mining and trading in a wide range of commodities.
The marketing segment of the company approached the higher end of the guidance with an adjusted earnings before interest and taxes, or Ebit, of $1.5 billion. Compared to the first six months of 2017, that was a 12% growth.
Its economic health also distinguishes the company as a top performer in the industry. Its per unit cost is among the most competitive in the industry. As a result, the industrial business segment jumped 26% as a result of adjusted Ebitda of $6.7 billion.
Glencore has assets and holds mineral interests all over the world. The company is engaged in the business of copper, zinc, lead, cobalt, nickel, ferrochrome, coal and oil.
For full fiscal 2018, Glencore predicted to deliver about 1.465 million tons of copper, 39,000 tons of cobalt, 1.09 million tons of zinc, 285,000 tons of lead, 132,000 tons of nickel, 1.6 million tons of ferrochrome, 132 million tons of coal and about 4.9 million barrels of oil.
In its cash flow, Glencore reported inflows from operations of $5.6 billion, an 8% increase from the same period of 2017.
A snapshot of the company's balance sheet at June 30, 2018 reflected a net debt of $9 billion. The balance sheet has been deleveraged. It will take a bit more than six months to pay back its total debt, which is an improvement of three months compared to 2017.
The balance sheet is solid and shareholders are expected to benefit from a 4.3%, granting forward annual dividend of 18 cents per ordinary share. The shareholders are also expected to take part in a $1 billion repurchase program.
Glencore's business model and commodity mix supports an operating cash flow that is able to sustain the future payment of dividends. It also is able to fund the buy-back program and to pursue the goal of debt reduction. The company can also rely on $5 billion in cash on hand and short-term securities.
The stock in Glencore traded at $4.19 per share for a market capitalization of about $59 billion. The common stock is composed by about 14 million shares. The price-book ratio is 0.97 times towards an industry median of about 2.06 times.
The 52-week range is $3.92 to $5.40 per share.
For the 52 weeks through August 7, the stock in Glencore has fallen 2.4% and is trading below the 50-SMA line value of $4.5, the 100-SMA line value of $4.62 and the 200-SMA line value of $4.75.
The recommendation rating is 2 out of 5 and the average target price is $5.67 per share.
(Disclosure: I have no positions in Glencore Plc.)
