Glencore shares lost ground today after the company reported strong financial results but disappointed hopes of a share buyback or dividend increase.
The commodities giant notched up a near 70% rise in earnings before interest, tax depreciation and amortization over the first half of 2017. However, Glencore shares were down by around 2.3% in London trading.
Higher commodities prices helped the mining and commodities trading group swing to a profit of $2.5bn for the first six months of the year versus a loss of $369m for the same period of 2016.
Improvement in pricing for copper, coal and zinc drove a more than 30% increase in revenues, which hit $100bn.
A firmer global growth outlook has helped copper prices rise by around 30% over the past year, to $2.9 per pound.
Glencore chief executive, Ivan Glasenberg, was upbeat on the Switzerland-based group´s outlook, claiming it was well positioned to benefit from the rapid rise of more environmentally friendly technology.
In particular, the increasing adoption of electric cars and the raw materials required for the manufacture of their batteries are expected to raise demand for key metals.
“The potential large-scale roll out of electric vehicles and energy storage systems looks set to unlock material new sources of demand for enabling underlying commodities, including copper, cobalt, zinc and nickel,” said Glasenberg.
Reflecting Glasenberg´s bullish tone, Glencore raised its full-year forecast for marketing adjusted earnings before interest and tax by $100m, putting the profit measure in a range of between $2.4bn and $2.7bn.
Glencore said its dividend for 2017 would be in line with market expectations, paying out around $1bn to shareholders.
There was some disappointment in the market that the group had not decided to release more cash.
At the same time, Glasenberg also hinted that the company could become more active on the mergers and acquisitions front.