Glencore (GLEN) H1 2024 earnings summary

Executive summary

• Adjusted EBITDA for H1 2024 was $6.3bn, down 33% year-over-year, mainly due to lower coal prices and reduced industrial earnings.

• The acquisition of EVR, a leading steelmaking coal producer, was completed in July, supporting future production and earnings.

• Net debt reduced to $3.6bn from $4.9bn at end-2023, after $2.9bn capex and $1bn shareholder returns; strong cash generation and liquidity position.

• Shareholders strongly supported the Climate Action Transition Plan, and all outstanding government investigations were resolved.

• Board decided to retain coal and carbon steel business after shareholder consultation, supporting cash generation and transition metals investment.

Financial highlights

• Revenue rose 9% year-over-year to $117.1bn; Adjusted EBITDA down 33% to $6.3bn; Adjusted EBIT down 55% to $2.85bn.

• Net funding reduced by $1.7bn to $29.4bn; net debt/Adjusted EBITDA at 0.26x (c.0.75x pro forma for EVR).

• Funds from operations up 9% to $4.04bn; net capital expenditure $2.9bn, up 15% year-over-year.

• Spot annualised free cash flow generation, including EVR, estimated at $6.1bn.

• Net loss attributable to equity holders was $233m after $1.7bn in significant items, including $1bn impairments.

Outlook and guidance

• 2024 full-year production guidance (ex-EVR) maintained; H2 expected to be stronger due to EVR and higher copper, zinc, and nickel output.

• Steelmaking coal guidance for 2024 raised to 19-21Mt (from 3.4Mt in H1), including c.12Mt from EVR; thermal coal guidance unchanged at 98-106Mt.

• CapEx guidance unchanged at $5.7bn per year for 2024–2026, with up to $400m earmarked for Argentinian copper projects.

• Marketing EBIT guidance maintained at $3–$3.5bn for FY24, with potential upside from EVR synergies.

• Modest deleveraging required to reach $10bn net debt cap, supporting potential top-up shareholder returns in February 2025.