The mining conglomerate Glencore reports a decline in half-year results as coal prices retract from record highs following the resettlement price from Russia to Ukraine. This led to a significant reduction in investor distributions.

The world's largest company by revenue announced on Wednesday that the adjusted earnings before interest, taxes, depreciation, and amortization fell to 17.10 billion US dollars from 34.06 billion US dollars the previous year.

The consensus estimate provided by the Swiss company was $17.15 billion. As usual, most of the profits came from industrial activities, with adjusted EBITDA in 2022 falling to $13.20 billion when coal assets contributed $17.92 billion following Russia's war in Ukraine, reaching historical highs.

Last year, profits from coal amounted to 7.97 billion US dollars. This decline reflects lower average energy prices, with coal and liquefied natural gas prices – and to a lesser extent oil – dramatically falling from the unprecedented highs of 2022, according to the commodity mining and trading giant.

In comparison, the adjusted EBITDA from copper dropped from 5.73 billion USD to 3.95 billion USD, while zinc profits fell from 1.48 billion USD to 995 million USD. The adjusted EBITDA from the marketing business - Glencore's trading division - also fell from 6.795 billion USD to 3.90 billion USD, also due to normalized energy markets.

The analysts had expected that the adjusted EBITDA for the industrial and marketing segment would be at $13.13 billion and $4.02 billion respectively. Net profit fell by 75% to $4.28 billion, mainly burdened by significant charges of $2.48 billion. These primarily included write-downs due to lower cobalt price assumptions and revisions of zinc assets. According to a FactSet survey, analysts had anticipated a profit of $7.09 billion.

The revenue, at 217.83 billion US dollars, exceeded analysts' expectations, but was significantly below the historical highs of 255.98 billion US dollars the previous year. "As the world moves towards a low-carbon economy, we continue to focus on meeting today's energy needs while at the same time investing in our transition metals portfolio," said CEO Gary Nagle.

Glencore now plans to return significantly less money to its shareholders than last year, proposing a dividend of $0.13 per share, which amounts to approximately $1.6 billion. Currently, a dividend on share buybacks is not planned. In comparison, the company distributed a dividend of $5.1 billion or $0.40 per share a year ago, including an additional $500 million in distributions and $1.5 billion in share buybacks.

Due to the Acquisition of Teck Resources' Coal Division Elk Valley Resources for 6.93 Billion Dollars Announced in November, the Company Stated on Wednesday That It Now Has Its Finances "Under Control". The Cut in Distributions to Shareholders Follows Rio Tinto's Announcement on Wednesday That the Australian Company Also Plans a Reduced Payout After a 19% Decrease in Net Profit.

Glencore Reaffirms its Production Targets Announced Earlier this Month, Expects Lower Unit Costs for Copper, Zinc, Nickel, and Coal for the Current Year. At 0805 GMT, Glencore Shares Fell by 3.7% to 375.85 Pence.