Glencore joined rival miners Rio Tinto (RIO.L), (RIO.AX), Teck Resources (TECKb.TO) and Anglo American (AAL.L) in reporting lower profit and returns as economic growth remained lacklustre. But the miner and trader was still optimistic on prospects for the world's largest commodities consumer China.
"It may not be the bonanza that everybody was expecting, but China is not all that bad," CEO Gary Nagle said.
Glencore's adjusted core earnings, or earnings before interest, tax, depreciation and amortisation (EBITDA), fell to $9.39 billion in the six months through June, from $18.92 billion a year earlier. Analysts at Deutsche Bank had expected half-year earnings of $9.9 billion, while Citi's estimate was $11.4 billion.
"We expect mid-single digit downwards revision to consensus expectations for full year EBITDA and cash flow on the back of weaker interim earnings," Citi analysts said.
The company announced additional returns of around $2.2 billion, including a $1 billion special dividend and a $1.2 billion share buyback programme that will run until February 2024.
This compared to an additional $4.5 billion in same period of 2022, including a $1.45 billion special dividend and a $3 billion share buyback.
Glencore's shares had fallen 2.6% by 0738 GMT, to their lowest since July 11.
M&A remains firmly on the Swiss commodities giant's agenda, after selling more than 20 non-core assets to focus its portfolio on the minerals needed to power the green energy boom.
"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," Nagle said.
Glencore in June offered to buy Teck's coal business as a standalone unit, having been rebuffed twice in its $22.5 billon bid to combine the two companies.
As part of the deal, Glencore would spin-off and merge its thermal coal business with Teck's steelmaking coal one to form a separate New York-listed company.
In July, the London-listed miner agreed to buy out its partners in Argentine copper project MARA and acquired the stake it didn't already own in U.S.-based PolyMet, bulking up on copper and nickel.
On Tuesday, Glencore said its divestment of agricultural business Viterra and subsequent merger with U.S. giant Bunge is expected to close in the middle of 2024.
