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GLN - 2024 Half-Year Report
GLENCORE
GLENCORE PLC
(Incorporated in Jersey under the Companies (Jersey) Law 1991)
(Registration number 107710)
JSE Share Code: GLN
LSE Share Code: GLEN
ISIN: JE00B4T3BW64
Glencore LEI: 2138002658CPO9NBH955
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.$6.1 billion, augers well
for potential top-up shareholder returns, above our base cash distribution, in February 2025.
"The strength of our diversified business model across marketing and industrial has proven itself adept in a range of market
conditions, giving us a solid foundation to successfully navigate the near-term macroeconomic uncertainty. We continue to remain
focused on operating safely, responsibly and ethically and creating sustainable long-term value for all our stakeholders."
US$ million H1 2024 H1 2023 Change % 2023
Key statement of income and cash flows highlights1:
Revenue 117,091 107,415 9 217,829
Adjusted EBITDA# 6,335 9,397 (33) 17,102
Adjusted EBIT# 2,850 6,305 (55) 10,392
Net (loss)/income for the period attributable to equity holders (233) 4,568 n.m. 4,280
(Loss)/earnings per share (Basic) (US$) (0.02) 0.36 n.m. 0.34
Funds from operations (FFO)(2)# 4,037 3,712 9 9,452
US$ million 30.06.2024 31.12.2023 Change %
Key financial position highlights:
Total assets 120,690 123,869 (3)
Total equity 35,763 38,237 (6)
Net funding(2,3)# 29,360 31,062 (5)
Net debt(2,3)# 3,648 4,917 (26)
Ratios:
Net debt to Adjusted EBITDA(4)# 0.26 0.29 (10)
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
To view the full report on the Johannesburg Stock Exchange portal please click here:
https://senspdf.jse.co.za/documents/2024/JSE/ISSE/GLN/HY24Report.pdf
For further information please contact:
Investors
Martin Fewings t: +41 41 709 2880 m: +41 79 737 5642 martin.fewings@glencore.com
Media
Charles Watenphul t: +41 41 709 2462 m: +41 79 904 3320 charles.watenphul@glencore.com
www.glencore.com
Glencore LEI: 2138002658CPO9NBH955
Please refer to the end of this document for disclaimers including on forward-looking statements.
Notes for Editors
Glencore is one of the world's largest global diversified natural resource companies and a major producer and marketer of more than
60 commodities that advance everyday life. Through a network of assets, customers and suppliers that spans the globe, we produce,
process, recycle, source, market and distribute the commodities that support decarbonisation while meeting the energy needs of
today.
With over 150,000 employees and contractors and a strong footprint in over 35 countries in both established and emerging regions
for natural resources, our marketing and industrial activities are supported by a global network of more than 50 offices.
Glencore's customers are industrial consumers, such as those in the automotive, steel, power generation, battery manufacturing and
oil sectors. We also provide financing, logistics and other services to producers and consumers of commodities.
Glencore is proud to be a member of the Voluntary Principles on Security and Human Rights and the International Council on Mining
and Metals. We are an active participant in the Extractive Industries Transparency Initiative.
We will support the global effort to achieve the goals of the Paris Agreement through our efforts to decarbonise our own operational
footprint. We believe that we should take a holistic approach and have considered our commitment through the lens of our global
industrial emissions. Against a restated 2019 baseline, we are targeting to reduce our Scope 1, 2 and 3 industrial emissions by 15% by
the end of 2026, 25% by the end of 2030, 50% by the end of 2035 and we have an ambition to achieve net zero industrial emissions by
the end of 2050, subject to a supportive policy environment. For more information see our 2024-2026 Climate Action Transition Plan
and the About our emissions calculation and reporting section in our 2023 Annual Report, available on our website at
glencore.com/publications.
Important notice
This document does not constitute or form part of any offer or invitation to sell or issue, or any solicitation of any offer to purchase or
subscribe for any securities. This document does not purport to contain all of the information you may wish to consider.
Cautionary statement regarding forward-looking information
Certain descriptions in this document are oriented towards future events and therefore contains statements that are, or may be
deemed to be, "forward-looking statements" which are prospective in nature. Such statements may include, without limitation,
statements in respect of trends in commodity prices and currency exchange rates; demand for commodities; reserves and resources
and production forecasts; expectations, plans, strategies and objectives of management; expectations regarding financial
performance, results of operations and cash flows, climate scenarios; sustainability (including, without limitation, environmental, social
and governance) performance-related goals, ambitions, targets, intentions and aspirations; approval of certain projects and
consummation and impacts of certain transactions (including, without limitation, acquisitions and disposals); closures or divestments
of certain assets, operations or facilities (including, without limitation, associated costs); capital costs and scheduling; operating costs
and supply of materials and skilled employees; financings; anticipated productive lives of projects, mines and facilities; provisions and
contingent liabilities; and tax, legal and regulatory developments.
These forward-looking statements may be identified by the use of forward-looking terminology, or the negative thereof including,
without limitation, "outlook", "guidance", "trend", "plans", "expects", "continues", "assumes", "is subject to", "budget", "scheduled",
"estimates", "aims", "forecasts", "risks", "intends", "positioned", "predicts", "projects", "anticipates", "believes", or variations of such words
or comparable terminology and phrases or statements that certain actions, events or results "may", "could", "should", "shall", "would",
"might" or "will" be taken, occur or be achieved. The information in this document provides an insight into how we currently intend to
direct the management of our businesses and assets and to deploy our capital to help us implement our strategy. The matters
disclosed in this document are a 'point in time' disclosure only. Forward-looking statements are not based on historical facts, but
rather on current predictions, expectations, beliefs, opinions, plans, objectives, goals, intentions and projections about future events,
results of operations, prospects, financial conditions and discussions of strategy, and reflect judgments, assumptions, estimates and
other information available as at the date of this document or the date of the corresponding planning or scenario analysis process.
By their nature, forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause
actual results, performance or achievements to differ materially from any future event, results, performance, achievements or other
outcomes expressed or implied by such forward-looking statements. Important factors that could impact these uncertainties include
(without limitation) those disclosed in the risk management section of our latest Annual Report and/or Half-Year Report (which can
each be found on our website). These risks and uncertainties may materially affect the timing and feasibility of particular
developments. Other factors which impact risks and uncertainties include, without limitation: the ability to produce and transport
products profitably; demand for our products and commodity prices; development, efficacy and adoption of new or competing
technologies; changing or divergent preferences and expectations of our stakeholders; events giving rise to adverse reputational
impacts; changes to the assumptions regarding the recoverable value of our tangible and intangible assets; inadequate estimates of
resources and reserves; changes in environmental scenarios and related regulations, including, without limitation, transition risks and
the evolution and development of the global transition to a low carbon economy; recovery rates and other operational capabilities;
timing, quantum and nature of certain acquisitions and divestments; delays, overruns or other unexpected developments in
connection with significant projects; the ability to successfully manage the planning and execution of closure, reclamation and
rehabilitation of industrial sites; health, safety, environmental or social performance incidents; labor shortages or workforce
disruptions; natural catastrophes or adverse geological conditions, including, without limitation, the physical risks associated with
climate change; effects of global pandemics and outbreaks of infectious disease; the outcome of litigation or enforcement or
regulatory proceedings; the effect of foreign currency exchange rates on market prices and operating costs; actions by governmental
authorities, such as changes in taxation or regulation or changes in the decarbonisation policies and plans of other countries; breaches
of Glencore's policy framework, applicable laws or regulations; the availability of sufficient credit and management of liquidity and
counterparty risks; changes in economic and financial market conditions generally or in various countries or regions; political or
geopolitical uncertainty; and wars, political or civil unrest, acts of terrorism, cyber attacks or sabotage.
Readers, including, without limitation, investors and prospective investors, should review and consider these risks and uncertainties
(as well as the other risks identified in this document) when considering the information contained in this document. Readers should
also note that the high degree of uncertainty around the nature, timing and magnitude of climate-related risks, and the uncertainty
as to how the energy transition will evolve, makes it particularly difficult to determine all potential risks and opportunities and disclose
these and any potential impacts with precision. Neither Glencore nor any of its affiliates, associates, employees, directors, officers or
advisers, provides any representation, warranty, assurance or guarantee as to the accuracy, completeness or correctness, likelihood of
achievement or reasonableness of any forward-looking information contained in this document or that the events, results,
performance, achievements or other outcomes expressed or implied in any forward-looking statements in this document will actually
occur. Glencore cautions readers against reliance on any forward-looking statements contained in this document, particularly in light
of the long-term time horizon which this document discusses in certain instances and the inherent uncertainty in possible policy,
market and technological developments in the future.
No statement in this document is intended as any kind of forecast (including, without limitation, a profit forecast or a profit estimate),
guarantee or prediction of future events or performance and past performance cannot be relied on as a guide to future performance.
Except as required by applicable rules and regulations or by law, Glencore is not under any obligation, and Glencore and its affiliates
expressly disclaim any intention, obligation or undertaking, to update or revise any forward-looking statements, whether as a result
of new information, future events or otherwise. This document shall not, under any circumstances, create any implication that there
has been no change in the business or affairs of Glencore since the date of this document or that the information contained herein is
correct as at any time subsequent to its date.
Cautionary statement regarding climate strategy
Glencore operates in a dynamic and uncertain market and external environment. Plans and strategies can and must adapt in
response to dynamic market conditions, changing preferences of our stakeholders, joint venture decisions, changing weather and
climate patterns, new opportunities that might arise or other changing circumstances. Investors should assume that our climate
strategy will evolve and be updated as time passes. Additionally, a number of aspects of our strategy involve developments or
workstreams that are complex and may be delayed, more costly than anticipated or unsuccessful for many reasons, including, without
limitation, reasons that are outside of Glencore's control. Our strategy will also necessarily be impacted by changes in our business.
There are inherent limitations to scenario analysis and it is difficult to predict which, if any, of the scenarios might eventuate. Scenario
analysis relies on assumptions that may or may not be, or prove to be, correct and that may or may not eventuate and scenarios may
also be impacted by additional factors to the assumptions disclosed. Given these limitations we treat these scenarios as one of several
inputs that we consider in our climate strategy.
Due to the inherent uncertainty and limitations in measuring greenhouse gas (GHG) emissions and operational energy consumption
under the calculation methodologies used in the preparation of such data, all CO2e emissions and operational energy consumption
data or volume references (including, without limitation, ratios and/or percentages) in this document are estimates. GHG emissions
calculation and reporting methodologies may change or be progressively refined over time resulting in the need to restate previously
reported data. There may also be differences in the manner that third parties calculate or report such data compared to Glencore,
which means that third-party data may not be comparable to Glencore's data. For information on how we calculate our emissions,
see our latest Basis of Reporting, Climate Report and Extended ESG Data, which is available on our website.
Sources
Certain statistical and other information included in this document is sourced from publicly available third-party sources. This
information has not been independently verified and presents the view of those third parties, and may not necessarily correspond to
the views held by Glencore and Glencore expressly disclaims any responsibility for, or liability in respect of, and makes no
representation or guarantee in relation to, such information (including, without limitation, as to its accuracy, completeness or whether
it is current). Glencore cautions readers against reliance on any of the industry, market or other third-party data or information
contained in this document.
Information preparation
In preparing this document, Glencore has made certain estimates and assumptions that may affect the information presented.
Certain information is derived from management accounts, is unaudited and based on information Glencore has available to it at the
time. Figures throughout this document are subject to rounding adjustments. The information presented is subject to change at any
time without notice and we do not intend to update this information except as required.
This document contains alternative performance measures which reflect how Glencore's management assesses the performance of
the Group, including results that exclude certain items included in our reported results. These alternative performance measures
should be considered in addition to, and not as a substitute for, or as superior to, measures of financial performance or position
reported in accordance with IFRS. Such measures may not be uniformly defined by all companies, including those in Glencore's
industry. Accordingly, the alternative performance measures presented may not be comparable with similarly titled measures
disclosed by other companies. Further information can be found in our reporting suite available at glencore.com/publications.
Subject to any terms implied by law which cannot be excluded, Glencore accepts no responsibility for any loss, damage, cost or
expense (whether direct or indirect) incurred by any person as a result of any error, omission or misrepresentation in information in
this document.
Other information
The companies in which Glencore plc directly and indirectly has an interest are separate and distinct legal entities. In this document,
"Glencore", "Glencore group" and "Group" are used for convenience only where references are made to Glencore plc and its
subsidiaries in general. These collective expressions are used for ease of reference only and do not imply any other relationship
between the companies. Likewise, the words "we", "us" and "our" are also used to refer collectively to members of the Group or to
those who work for them. These expressions are also used where no useful purpose is served by identifying the particular company
or companies.
Sponsor
Absa Corporate and Investment Bank, a division of Absa Bank Limited
Date: 07-08-2024 08:09:00
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