Glencore PLC

The company's board may also discuss decisions related to its agricultural business Viterra, in which Glencore owns a 49% stake (EBITDA of about $1 billion). While not factored into our base case, we believe that a gradual reduction in Glencore's ownership is likely in the coming years. The stable outlook on Glencore reflects the ample headroom under the rating in the coming 24 months, even if commodity prices were much less supportive. Under our current price assumptions, we project adjusted EBITDA of $16.5 billion-$17.0 billion in 2021 (equivalent to underlying EBITDA of $13.0 billion-$13.5 billion), which translates to adjusted funds from operations (FFO) to debt of about 60%-65%. The latter compares with our minimum multiyear threshold of about 40%-45% for

...We expect Glencore will post record earnings in 2021, thanks to strong copper, zinc, and coal prices, allowing the company to maintain ample headroom under the rating as it shifts its focus to shareholders remuneration. We expect Glencore's underlying EBITDA to be $13.0 billion-$13.5 billion in 2021, compared with $8.7 billion in 2020, given our working price assumptions for its main metals for the rest of the year ($8,500/ton for copper, $2,600/ton for zinc and $70/ton for thermal coal). There is substantial additional upside to EBITDA if prices remain at current levels (as of early June the commodities traded around $10,000/ton for copper, $3,000/ton for zinc, and $110/ton for thermal coal). With relatively limited capital expenditure (capex) needs, we expect the company will use the $5.5 billion-$6.0 billion of free operating cash flow (FOCF) generated in 2021 for further net debt reduction (a few billion) and shareholders remuneration ($2.0 billion-$2.5 billion), bringing reported net...

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