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Mining and commodity trading giant Glencore said on Tuesday its core earnings halved in the first six months of 2023 on the back of lower energy commodity prices and less intense market volatility compared to the same period last year.
Glencore reported core earnings – or adjusted earnings before interest, tax, depreciation and amortization (EBITDA) – of $9.4 billion for the first six months of this year, down by 50% annually.
The mining and trading group also sharply reduced additional payout to shareholders compared to the same period of 2022. The additional return to shareholders is set at $2.2 billion, via a special cash distribution of a total of around $1 billion (or $0.08 per share), and a new share buyback program of $1.2 billion intended to run until the release of the full-year results in February 2024.
Glencore’s additional shareholder payout is much lower than in January-June 2022 when the company paid a special cash distribution of a total of
$1.45 billion and carried out a $3-billion share buyback.
“Following 2022, a year characterised by extreme global geopolitical and economic turbulence, generating extraordinary energy market dislocation, volatility, supply disruption and record prices for many coal and gas benchmarks, 2023 has, for the most part, seen energy trade flows rebalance and normalise, with coal, oil and gas prices materially declining over H1 2023,” Glencore said in a statement.
“In addition to the significant weakening in energy markets, the recent overall cycle of inflation, tighter monetary conditions and limited global economic growth, contributed to average period-over-period price reductions in copper, cobalt, nickel and zinc of 11%, 59%, 13% and 26% respectively.”
In the Western markets, the recent easing of the inflationary pressures has allowed for the restart of previously shuttered energy-intensive industries, including some steel, zinc, and aluminum production. But the upside has been limited by weak end-user markets, particularly in Europe, Glencore noted.
By Tsvetana Paraskova for Oilprice.com
Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.