TIDMGLEN
RNS Number : 5619I
Glencore PLC
08 August 2023
NEWS RELEASE
Baar, 8 August 2023
2023 Half-Year Report
Highlights
Glencore's Chief Executive Officer, Gary Nagle, commented:
"The strength of our diversified business model across
industrial and marketing, focusing on metals and energy, has again
proved itself adept in a range of market conditions.
"Against the backdrop of a normalisation of commodity market
imbalances and volatility, primarily across the energy spectrum,
our Marketing and Industrial segments posted a healthy earnings
performance, delivering Group Adjusted EBITDA of $9.4 billion, cash
generated by operating activities of $8.4 billion and Net income
attributable to equity holders of $4.6 billion.
"Reflecting these solid headline earnings, together with a $3.7
billion release of net working capital, including $1.4 billion of
readily marketable inventories, net funding remained static over
the period, after disbursing $5.2 billion of shareholder returns,
$2.5 billion of net capital expenditure and $2.7 billion of final
2022 tax payments in Australia and Colombia. Net debt finished the
period at
$1.5 billion.
"Our shareholder returns framework of managing Net debt, in the
ordinary course of business, around a $10 billion cap, with
deleveraging periodically returned to shareholders, informed
today's announcement of additional "top-up" returns of c.$2.2
billion, lifting total announced shareholder returns this year to
c.$9.3 billion.
"As the world moves towards a low-carbon economy, we remain
focused on supporting the energy needs of today whilst investing in
our transition metals portfolio. Over the year to date, we
committed $1.25 billion, mainly on purchasing the balance of the
large, long-life MARA copper project, not already held by Glencore,
and acquiring a minority stake in Alunorte, a world class alumina
refinery, thereby providing Glencore with long-term exposure to
lower-quartile carbon alumina.
"We look to the future confident that we have the right pathway
to succeed in a Net-zero economy and create sustainable long-term
value for all stakeholders, while operating in a responsible and
ethical manner across all aspects of our business."
Change
US$ million H1 2023 H1 2022 % 2022
--------------------------------------- -------- -------- ------ --------
Key statement of income and cash flows
highlights(1) :
Revenue 107,415 134,435 (20) 255,984
Adjusted EBITDA 9,397 18,918 (50) 34,060
Adjusted EBIT 6,305 15,415 (59) 26,657
Net income for the period attributable
to equity holders 4,568 12,085 (62) 17,320
Earnings per share (Basic) (US$) 0.36 0.92 (61) 1.33
Change
US$ million 30.06.2023 31.12.2022 %
----------------------------------- ---------- ---------- ------
Key financial position highlights:
Total assets 121,754 132,583 (8)
Total equity 41,173 45,219 (9)
Net funding(2) 27,533 27,500 0
Net debt(2) 1,542 75 1,956
----------------------------------- ---------- ---------- ------
Ratios:
Net debt to Adjusted EBITDA(3) 0.06 0.00 n.m
1 Refer to basis of presentation on page 7.
2 Refer to page 10.
3 H1 2023 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 73 for definitions and reconciliations and
to note 3 of the financial statements for reconciliation of
Adjusted EBIT/EBITDA.
2023 HALF-YEAR FINANCIAL SCORECARD
-- Marketing Adjusted EBIT of $1.8 billion, annualising above
our $2.2-3.2 billion p.a. long-term guidance range, down 52%
period-on-period from last year's exceptionally strong
performance
-- Industrial Assets Adjusted EBITDA of $7.4 billion, down 51%,
impacted primarily by lower pricing, particularly in coal, as well
as inflationary cost impacts across the asset base, much of it
having lagged and been heavily influenced by the surge in energy
prices during 2022.
-- $9.4 billion Adjusted EBITDA, down 50%, reflecting the
normalisation of primarily energy market imbalances and volatility
from the extreme levels seen in 2022
-- Net income attributable to equity holders was $4.6 billion
($12.1 billion in H1 2022), down 61%
-- Adjusted EBITDA mining margins were 25% in our metals
operations and 50% in our energy operations, compared to 43% and
66% respectively during H1 2022
INVESTING IN TRANSITION METALS
-- $1.25 billion of recent investment commitments in transition metals, comprising:
- $700 million to acquire a 30% equity stake in Alunorte and a
45% equity stake in Mineracão Rio do Norte S.A., from Norsk
Hydro;
- $475 million to acquire the remaining 56.25% interest in the
MARA copper project, not already owned, from Pan American Silver,
taking Glencore to 100% ownership;
- $73 million to acquire the remaining 18% in Polymet not
already owned, a 50:50 JV partner in the New Range Copper Nickel
venture with Teck Resources in Minnesota.
BALANCE SHEET
-- After consideration of near-term cash commitments and
potential M&A, period-end Net debt of $1.5 billion,
supported
c.$2.2 billion of "top-up" shareholder payments, lifting total
2023 announced shareholder returns to c.$9.3 billion.
-- This additional return will be effected by way of a c.$1
billion ($0.08 per share) special cash distribution and a new $1.2
billion buyback programme intended to run until release of our full
year results in February 2024. The special cash distribution of
$0.08 per share will be paid alongside the $0.22 per share
second tranche of the cash distribution announced in February
2023
-- Available committed liquidity of $12.9 billion; bond
maturities maintained around a cap of $3 billion in any given
year
-- In June 2023, Glencore agreed to dispose of its interest in
Viterra in a cash and shares transaction with Bunge. For its 50%
stake, Glencore will receive $1.0 billion in cash and c.$3.1
billion in Bunge stock (basis Bunge's stock price at the date of
announcement, but worth c.$3.8 billion (up 23%) as of 4 August
2023). The merger is expected to close in mid-2024.
-- Spot illustrative annualised free cash flow generation of
c.$7.3 billion from Adjusted EBITDA of c.$17.4 billion
PROGRESSING OUR CLIMATE STRATEGY
-- Shareholders gave broad support for the progress of our
Climate Action Transition Plan at the 2023 AGM, with c.70% voting
in favour
-- We recognise that some shareholders chose not to support this
resolution and we will continue to engage with shareholders so as
to ensure their views are fully understood
-- We will publish an update on this engagement, in accordance
with the UK Corporate Governance Code, within six months of the
2023 AGM
To view the full report please click
https://www.glencore.com/.rest/api/v1/documents/static/a6349da6-3d11-4662-9107-28e19667d236/GLEN-2023-Half-Year-Report.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 around 140,000 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 40
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 recognise our responsibility to contribute to the global
effort to achieve the goals of the Paris Agreement by decarbonising
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 2019 baseline,
we are committed to reducing our Scope 1, 2 and 3 industrial
emissions by 15% by the end of 2026, 50% by the end of 2035 and we
have an ambition to achieve net zero industrial emissions by the
end of 2050. For more detail see our 2022 Climate Report on the
publication page of our website at glencore.com/publications.
Important notice concerning this report including
forward-looking statements
Given the focus of this document, it is necessarily 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; climate scenarios; sustainability
performance (including, without limitation, environmental, social
and governance) related goals, ambitions, targets, intentions,
visions, milestones and aspirations; approval of certain projects
and consummation 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",
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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 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; changes to the assumptions
regarding the recoverable value of our tangible and intangible
assets; 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; health, safety,
environmental or social performance incidents; natural catastrophes
or adverse geological conditions, including (without limitation)
the physical risks associated with climate change; 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 plans of
other countries; and political uncertainty.
Readers, including (without limitation) investors and
prospective investors, should review and take into account 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 difficult to determine and
disclose the risks and their potential impacts with precision.
Neither Glencore nor any of its affiliates, associates, employees,
directors, officers or advisers, provides any representation,
warranty, assurance or guarantee that the occurrence of 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 report discusses
and the inherent uncertainty in possible policy, market and
technological developments in future.
No statement in this document is intended as any kind of
forecast (including, without limitation, a profit forecast or a
profit estimate), guarantees or predictions of future events or
performance and past performance cannot be relied on as a guide to
future performance. 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.
Glencore operates in a dynamic and uncertain market and external
environment. Plans and strategies can and must adapt in response to
dynamic market conditions, joint venture decisions, new
opportunities that might arise or other changing circumstances.
Investors should not assume that our strategy on climate change
will not 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.
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 CO(2) e emissions and operational energy consumption data
or volume references (including, without limitation, ratios and/or
percentages) in this document are estimates. 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 and operational energy consumption data,
see our latest Basis of Reporting, Climate Report and Extended ESG
Data, which can be found on our website.
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.
Except as required by applicable 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
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contained herein is correct as at any time subsequent to its date.
Certain statistical and other information about Glencore included
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completeness or whether it is current). Glencore cautions readers
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