Glencore expects 2022 earnings to beat guidance on Q1 trading boost

Mining and commodity trading giant Glencore expects to report full-year 2022 earnings that "comfortably exceed" its guidance range after global market volatility in the wake of Russia's invasion of Ukraine boosted its trading profits, the company said April 28.

The Switzerland-based group, which has already reported record earnings for 2021 helped by the economic recovery from COVID-19, said its trading activities in the first quarter continued to be buoyed by tight physical market conditions and "periods of extreme volatility."

"Extrapolating our Q1 performance would see our marketing segment's full-year earnings comfortably exceeding the top end of our long-term adjusted EBIT guidance range of $2.2 billion - $3.2 billion," Glencore said in a Q1 corporate update.

In February, Glencore reported total adjusted trading earnings of $3.69 billion for the year, up 11% over 2020, helped by a 50% jump in metal trade earnings boosted by sharply higher volumes of alumina/aluminum and nickel, which are key to electric mobility and batteries. Its oil trading results by volume were unable to match 2020 levels, however, when Glencore --like other independent traders-- capitalized on the exceptional price movements and dislocations across crude oil, refined products, storage and logistics.

Since the start of the year, the S&P GSCI commodity price index has gained more than 33% as the war in Ukraine rattles key commodity markets and global supply chains which are already stretched as the world emerges from COVID-19 lockdowns.

Glencore also said its oil and gas production in Q1 2022 rose 40% from year-ago levels to 1.5 million boe, reflecting the ramp-up of gas production from the Alen project off Equatorial Guinea from March 2021.