Shareholder Consensus
Glencore has scrapped its plan to sell its coal business after consulting with shareholders, who overwhelmingly supported keeping the company’s coal assets. The decision was influenced by the potential for significant profits and the slowing down of environmental, social, and governance (ESG) investments.
Financial Results
The company released its first half earnings report, which showed a revenue of $117 billion (€107 billion), a 9% increase from the same period last year. Adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $6.3 billion (€5.8 billion), a 33% decline from the same period last year. The company’s net loss was $233 million (€213 million), a significant reversal from the $4.6 billion profit seen in the first half of last year.
Coal Business Revival
The decision to retain the coal business is expected to generate significant revenues, which will be used to invest in the company’s transition metals portfolio, such as copper projects. The revenues will also increase shareholder returns. The company’s CEO, Gary Nagle, stated that the board has endorsed the retention of the coal business, which will provide optimal value creation for shareholders.
Cobalt Stockpiling
Glencore has also revealed that it will no longer be stockpiling cobalt, a key battery metal, having already bought significant supplies of the metal in the first half of last year. The company believes that the Democratic Republic of Congo, the world’s biggest producer of cobalt, will increase production in the coming years, leading to potential oversupply in the market for the next 18-20 months.
Bribery Case Settlement
Glencore has also recently settled a Swiss bribery case from 2011, agreeing to pay a fine of $152 million (€139 million). The company has not accepted the findings of the probe but has decided to resolve the matter quickly by paying the fine without appealing or contesting it.
SOURCE: Ref Image from News24
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