Glencore shares drop as profits sink 50%

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".