Glencore Keeps Its Powder Dry, But Hints at Bigger Returns – by Thomas Biesheuvel (Bloomberg News – August 8, 2018)

Glencore Plc investors looking for bigger shareholder returns after the commodities giant’s record first-half profit may yet get their way.

While the company’s failure to increase its dividend or share buyback leaves the door open for more acquisitions, it emphasized that the focus will remain on cutting debt and returning money to shareholders. As far as potential deals go, Chief Executive Officer Ivan Glasenberg said there’s little out there.

“There nothing that looks that exciting. We don’t see anything great right now,” Glasenberg said on a call with investors. “But the thing we could do is return cash to shareholders.”

It’s been a tough year for Glencore, with challenges spanning from the Democratic Republic of Congo to Russia and, most worryingly, a corruption probe by the U.S. Department of Justice. The company didn’t provide any material updates on the DOJ probe in its statement Wednesday and interim earnings, while a record, slightly missed analyst estimates.

“There is no ‘big bang’ within today’s results,” RBC Capital Markets analyst Tyler Broda said in a note to investors. “The company is trading at a substantial discount to peers on a free cash yield basis with a strong balance sheet.

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