Glencore expands and extends share buy-back program

Glencore (LON: GLEN) is increasing its share buy-back program by up to an additional US$1 billion.

The commodities giant has already purchased 230.2 million of its own shares valued at US$939.1 million under an existing program.

The duration of the program has been extended to Feb. 20 2019.

In early August, Glencore reported first-half results that included a 13% increase in net income to US$2.8 billion and a 23% increase in adjusted EBITDA to US$8.3 billion, and CEO Ivan Glasenberg emphasized the company’s focus on delivering value to shareholders.

“Cash generation remains strong, with FFO [funds from operations] up 8% to US$5.6 billion and our balance sheet healthy, with net debt of US$9 billion,” Glasenberg stated in a press release. “In addition to the US$2.85 billion of shareholder distributions announced earlier this year, we recently announced a US$1 billion buy-back programme.

“While broader market conditions are likely to remain volatile, confidence in our business prospects and current share trading levels point to near-term focus on deleveraging and shareholder returns/buybacks funded through cash generation. We remain focused on creating value for shareholders through the disciplined allocation of long-term capital.”

Large share buy-backs seem to be in vogue this year. Earlier this month, Rio Tinto (LON: RIO) said it plans to buy back shares worth US$3.2 billion. The funds were generated from the sale of coal assets. Rio’s latest buy-back plan comes on top of the company’s existing buy-back program, of which US$1.7 billion in shares remain to be purchased before the end of February 2019.