Glencore, the Anglo-Swiss commodity mining and trading company, has announced a decrease in first-half profit due to various factors impacting commodity prices. The weakening of energy markets, inflationary pressures, and limited global economic growth have all contributed to this decline.
For the six months ended June 30, Glencore reported a net profit of $4.57 billion. This figure represents a significant decrease compared to the $12.09 billion reported during the same period last year.
The company’s adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) saw a 50% decline, reaching $9.40 billion. This indicates the normalization of energy market imbalances and volatility from levels seen in 2022.
Furthermore, Glencore’s net debt stood at $1.54 billion at the end of June, compared to $75 million at the end of the previous year.
To maintain shareholder confidence, Glencore has increased its total 2023 shareholder returns to approximately $9.3 billion. This will be achieved through a special cash distribution of around $1 billion and a $1.2-billion buyback program scheduled until the release of full-year results in February 2024.
Glencore anticipates a more favorable macroeconomic backdrop in the second half of the year. The company attributes this positive outlook to moderating inflation and supportive government policies in China, particularly within end-user sectors.