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Glencore shares drop as profits sink 50%

(Sharecast News) - Shares in Glencore dropped sharply on Wednesday after the mining and commodities trader reported a halving of annual profits for 2023. Full-year adjusted EBITDA totalled $17.10bn for the 12 months to 31 December, down from $34.06bn in 2022.

That came in short of the $17.15bn consensus forecast provided by the company, and was a result of "the rebalancing and normalisation of international energy trade flows, with coal and LNG, and to a lesser extent, oil prices materially declining", the company said.

Adjusted profits in the metals division were down 41% on the year at $5.4bn due to lower cobalt, nickel and zinc prices, in addition to reduced volumes, while energy earnings sank 55% to $8.5bn on the back of significantly lower coal prices.

Meanwhile in the marketing division, adjusted EBIT dropped by 46% to $3.5 bn, as a 5% improvement in metals profits to $1.7bn was offset by a 67% tumble in energy to $1.7bn following a return to a more stable market environment, "following the extreme market volatility levels, dislocations and complexities exhibited during 2022".

The stock was down 5.6% at 368.75p by 0909 GMT, hitting a 52-week low of 365.31p early on.

Revenues were 15% lower year-on-year at $217.8bn. Net debt ballooned to $4.92bn from $75m the year before, but with relatively low leverage - bet debt/adjusted EBITDA of 0.29x - the company said it continues to "enjoy significant financial headroom and strength".

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Important information: This information is not a personal recommendation for any particular investment. If you are unsure about the suitability of an investment you should speak to one of Fidelity’s advisers or an authorised financial adviser of your choice. When you are thinking about investing in shares, it’s generally a good idea to consider holding them alongside other investments in a diversified portfolio of assets. Past performance is not a reliable indicator of future returns.

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