Glencore looks to buybacks, not dealmaking – by Barbara Lewis (Reuters U.S. – August 8, 2018)

LONDON (Reuters) – Glencore (GLEN.L) said it would favour share buybacks over deal-making after it reported a 23 percent rise in first-half core earnings on Wednesday, just below analyst forecasts.

The miner and commodities trader said its earnings for January-June were a record – building on 2017 full-year results it said were the best yet – but it also said higher costs and lower prices for cobalt and other byproducts ate into profits.

CEO Ivan Glasenberg said market conditions were likely to remain volatile. Many mining stocks have pared gains this year as metals markets weakened in response to trade tensions and uncertainty about Chinese demand.

While other producers have warned of cost inflation, Glencore’s share price has come under additional pressure from its exposure to Democratic Republic of Congo (DRC) and a U.S. Department of Justice (DoJ) investigation.

Days after it announced the investigation in July, Glencore said it would buy back shares worth $1 billion. On Wednesday it said further buybacks could be in the pipeline as the best way to reward shareholders.

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