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Glencore boosts dividend for FY'17 as net income surges 319% YOY

In line with its forecast, Glencore Plc boosted its 2017 dividend to 20 U.S. cents per share, from a year-ago dividend of 7 cents per share, after a 319% surge in net income.

The company's net income attributable to shareholders in 2017 increased to US$5.78 billion, or 40 cents per share, from US$1.38 billion, or 10 cents per share, in 2016. The figure exceeded the consensus of analyst forecasts, and Glencore's shares were trading up 4% in early London deals.

Glencore's metals and minerals and energy products segments delivered strong results on the back of higher commodity prices and strong unit cost performances, according to the Feb. 21 earnings release.

Revenue increased to US$205.48 billion in the year, compared to US$152.95 billion a year ago, while adjusted EBITDA jumped 44% year over year to US$14.8 million.

For the metals and minerals segment, revenue rose to US$80.47 billion from US$66.34 billion a year earlier, and adjusted EBITDA surged 36% to US$10.31 billion.

The company generated US$11.56 billion of funds from operations, a 49% increase year over year.

Glencore CEO Ivan Glasenberg said 2017's results were the company's "strongest on record, driven by our leading Marketing and Industrial asset businesses."

Marketing adjusted EBITDA "exceeded US$3 billion for the first time since 2008," improving 5% to US$3.22 billion, while industrial adjusted EBITDA rose 60% to US$11.5 billion compared to 2016.

The company cut its net debt 31% year over year to US$10.67 billion as of Dec. 31, 2017, achieving the lower end of its US$10 billion to US$16 billion target range.

Capital expenditure increased 21% on a yearly basis to US$4.23 billion.

Glencore's copper production in 2017 dropped 8% on a yearly basis to 1.3 million tonnes, while zinc output was stable at 1.1 million tonnes. Own-sourced nickel production declined 5% year over year to 109,100 tonnes in 2017, while full-year coal production decreased 3% to 120.6 million tonnes in 2017.

Glencore said it expects global copper supply to be impacted by aging assets, limited sector reinvestment, a diminished project pipeline and elevated risk of mine disruptions.

"With global economic growth pointing to healthy demand, the copper market is likely to remain in substantial supply deficit, which, if it occurs, will in turn result in further inventory drawdowns,” the company said.

It further expects the emerging battery and electric vehicle trend to support the demand outlook and attractive fundamentals, with copper and cobalt to play important roles in this sector going forward.