LONDON (Reuters) – Glencore said on Thursday it was scrapping its dividend to focus on lowering debt as the COVID-19 pandemic forced it to book a $3.2 billion impairment charge.
The miner and trader, which had expected to pay $2.6 billion in dividends, the economic outlook was too uncertain due to the coronavirus crisis to make the payout.
“The board has concluded that it would be inappropriate to make a distribution to shareholders in 2020, instead prioritising the acceleration of net debt reduction to within our target range,” Chief Executive Ivan Glasenberg said.
Glencore’s adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 13% to $4.8 billion in the six months to June compared to a year ago, beating the $4.3 billion expected by 14 analysts compiled by Vuma.
The miner posted a net loss of $2.6 billion in the period versus earnings of $226 million a year ago.
Glencore’s trading or marketing arm saw a record adjusted earnings before interest and taxes (EBIT) of $2 billion in the first-half as it benefitted from extreme volatility in the oil market.