Glencore (GLEN) H2 2023 earnings summary

Executive summary

• Adjusted EBITDA was $17.1bn, down 50% YoY, as 2022’s exceptional market dislocations and commodity prices normalized; marketing remained above its long-term guidance range.

• Portfolio changes focused on longer-life, lower-cost assets and transition commodities, alongside plans to reduce coal operations over time.

Financial highlights

• Adjusted Industrial EBITDA fell 52% to $13.2bn; Marketing Adjusted EBIT fell 46% to $3.5bn.

• Net income was $4.3bn versus $17.3bn in 2022; net income before significant items was $6.7bn versus $18.9bn.

• Funds from operations were $9.55bn, down 67%; excluding the $2.7bn lagged settlement of 2022 Australian and Colombian income taxes, the YoY decline was 58%.

• Cash generated from operating activities was $15.1bn, down 54%; net capex cash flow was $5.6bn, up 22%.

Outlook and guidance

• 2024 Marketing Adjusted EBIT guidance was initially set at ~$3.0bn, the midpoint of a $2.2–3.2bn long-term range, adjusted upward for elevated interest rates.

• 2024 production guidance: copper 950–1,010kt, zinc 900–950kt, nickel 80–90kt, coal 105–115Mt; guidance excludes Koniambo nickel output.

• 2024–2026 Industrial capex is expected to average $5.7bn annually, excluding EVR and up to ~$400m earmarked for MARA and El Pachón studies and early works.

• Illustrative annualized spot FCF was $5.2bn for the current portfolio and $18.0bn illustrative EBITDA including EVR; estimates use management assumptions and are subject to change.