NEWS RELEASE
Baar, 7 August 2024
2024 Half-Year Report
Highlights
Glencore's Chief Executive Officer, Gary Nagle,
commented:
"We are pleased to
report strong strategic achievements for the Group over the year to
date. Our Industrial portfolio has been further streamlined with
the sale of our Volcan stake and strengthened with the addition of
a 77% interest in Elk Valley Resources (EVR). Our updated Climate
Action Transition Plan (CATP) received more than 90% shareholder
support at our 2024 AGM, the Swiss and Dutch government
investigations have been resolved and our 2024 production guidance
has been maintained and enhanced, with a skew to the second half of
2024.
"Critically, we
have also clarified the immediate future of our coal and carbon
steel materials business. Following completion of the acquisition
of EVR in early July, we undertook an extensive consultation with
shareholders and based on the outcome of that process and the
Group's own analysis, Glencore's Board, considering both risk and
opportunity scenarios, endorsed the retention, rather than
demerger, of the coal and carbon steel materials business, as
currently providing the optimal pathway for demonstrable and
realisable value creation for Glencore shareholders.
"Some shareholders
stated that this was a decision for the Board alone to make, but of
the others, the overwhelming majority had a clear preference for
retention. This was primarily on the basis that retention should
enhance Glencore's cash-generating capacity to fund opportunities
in our transition metals portfolio, such as our copper growth
project pipeline, as well as accelerate and optimise the return of
excess cash flows to shareholders.
"Against the
backdrop of lower average prices for many of our key commodities
during the period, particularly thermal coal, our overall Group
Adjusted EBITDA of $6.3 billion was 33% below the comparable prior
year period, however Funds from Operations were up 9%, due to the
timing of income tax payments . We reported a Net loss attributable
to equity holders of $233 million, after recognising $1.7 billion
of significant items, including c.$1.0 billion of impairment
charges.
"Reflecting healthy
cash generation and after funding $2.9 billion of net capital
expenditure and $1.0 billion of shareholder returns, Net debt,
including Marketing-related lease liabilities, finished the first
half at $3.6 billion, down $1.3 billion compared to $4.9 billion at
the end of 2023.
"From Net debt of
$3.6 billion, accounting for Marketing-related lease liabilities of
$1.0 billion, H2 cash outflows of $6.9 billion for the EVR
acquisition and the $0.8 billion for the 2nd tranche of
the shareholder distribution due, all else being equal deleveraging
of just $0.3 billion would be required to reach the reset c.$10
billion net debt cap under our framework for excess return top-up
payments, compared to at least $5.3 billion of deleveraging that
would have been required under the original demerger
scenario.
"This relatively
modest gap of $0.3 billion, together with the $1 billion Viterra
cash disposal proceeds expected to be received over the next
several months and noting the healthy current spot illustrative
annualised free cash flow generation of c.$6.1 billion, augers well
for potential top-up shareholder returns, above our base cash
distribution, in February 2025.
"The strength of
our diversified business model across marketing and industrial has
proven itself adept in a range of market conditions, giving us a
solid foundation to successfully navigate the near-term
macroeconomic uncertainty. We continue to remain focused on
operating safely, responsibly and ethically and creating
sustainable long-term value for all our stakeholders."
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US$ million
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H1 2024
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H1 2023
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Change %
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2023
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Key statement of income and cash flows
highlights1:
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|
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Revenue
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117,091
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107,415
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9
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217,829
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Adjusted EBITDA◊
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6,335
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9,397
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(33)
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17,102
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Adjusted EBIT◊
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2,850
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6,305
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(55)
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10,392
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Net (loss)/income for the period attributable to
equity holders
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(233)
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4,568
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n.m.
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4,280
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(Loss)/earnings per share (Basic) (US$)
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(0.02)
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0.36
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n.m.
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0.34
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Funds from operations (FFO)2◊
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4,037
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3,712
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9
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9,452
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US$ million
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30.06.2024
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31.12.2023
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Change %
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Key financial position highlights:
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Total assets
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120,690
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123,869
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(3)
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Total equity
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35,763
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38,237
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(6)
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Net funding2,3◊
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29,360
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31,062
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(5)
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Net debt2,3◊
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3,648
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4,917
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(26)
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Ratios:
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|
|
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Net debt to Adjusted EBITDA4◊
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0.26
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0.29
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(10)
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1 Refer to basis of
presentation on page 6.
2 Refer to page
10.
3 Includes $952
million (2023: $705 million) of Marketing-related lease
liabilities.
4 H1 2024 ratio based
on last 12 months' Adjusted EBITDA, refer to APMs section for
reconciliation.
◊ Adjusted measures
referred to as Alternative performance measures (APMs) which are
not defined or specified under the requirements of International
Financial Reporting Standards; refer to APMs section on page 70 for
definitions and reconciliations and to note 3 of the condensed
consolidated interim financial statements for reconciliation of
Adjusted EBIT/EBITDA.
2024 HALF-YEAR FINANCIAL SCORECARD
• $6.3 billion
Adjusted EBITDA, down 33%, primarily reflecting the normalisation
of energy markets from the severe disruptions and volatilities seen
over 2022/23
• Marketing
Adjusted EBIT of $1.5 billion, down 16% period-on-period, tracking
on an annualised basis at $3.0 billion. The lower energy
contribution, reflecting prior period elevated volatilities, was
partially offset by a strong metals performance in H1 2024
• Industrial
Assets Adjusted EBITDA of $4.5 billion, down 39%, primarily driven
by a $2.7 billion lower contribution from our coal operations,
owing to the substantial average period-over-period declines in key
thermal coal pricing benchmarks
• 2024 full year
(ex-EVR) production guidance has been maintained, with production
expected to be second-half weighted. EVR steelmaking coal volumes
now incorporated into H2 guidance
• Net cash
purchase and sale of PP&E: $2.9 billion, up 15%
• Net income
attributable to equity holders pre significant items: $1.5 billion;
Net loss attributable to equity holders: $233 million
• Adjusted EBITDA
mining margins were 28% in our metals operations and 31% in our
energy operations
BALANCE SHEET
• Healthy H1 cash
generation: after funding $2.9 billion of net capital expenditure
and $1.0 billion of shareholder returns, Net debt finished the
first half at $3.6 billion compared to $4.9 billion at the end of
2023
• Net funding,
including lease liabilities, decreased to $29.4 billion, aided by a
$0.4 billion reduction in readily marketable inventories
• Available
committed liquidity of $16.6 billion; bond maturities maintained
around a cap of $3 billion in any given year
• Net
debt/Adjusted EBITDA of 0.26x (c.0.75x proforma for EVR) provides
significant financial headroom and strength
• In June 2023,
Glencore agreed to dispose of its interest in Viterra in a cash and
shares transaction with Bunge. For its c.50% stake, Glencore will
receive $1.0 billion in cash and c.$3.1 billion in Bunge stock
(reflecting Bunge's stock price at the date of announcement and
also currently as of 5 August 2024). The merger, which remains
subject to regulatory approvals, is expected to close within the
next several months
• Spot
illustrative annualised free cash flow generation, including EVR,
of c.$6.1 billion from Adjusted EBITDA of c.$17.3 billion
To view the full report please click
www.glencore.com/.rest/api/v1/documents/static/31bcbe31-4250-42cd-b6d8-1a7cb48efbd2/GLEN-2024-Half-Year-Report.pdf
For further information please contact:
Investors
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Martin Fewings
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t: +41 41 709 2880
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m: +41 79 737 5642
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martin.fewings@glencore.com
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Media
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Charles Watenphul
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t: +41 41 709 2462
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m: +41 79 904 3320
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charles.watenphul@glencore.com
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www.glencore.com
Glencore LEI:
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to a supportive policy environment. For more information see our
2024-2026 Climate Action Transition Plan and the About our
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