- Production growth inflection point reached
- $1 billion of savings identified
- New York listing plan shelved
Commodity trader and mining outfit Glencore’s (GLEN) first half losses widened as the FTSE 100 giant grappled with rising costs, weaker coal prices and lower copper production as well as the uncertainty unleashed by President Trump’s tariffs.
Shares in the Switzerland-based firm fell 4% to 289p on the downbeat results, although Glencore said a root-and-branch review has unearthed significant efficiency opportunities and the natural resources titan expects 2025 will mark an inflection point in its production growth outlook.
In some positive news for the beleaguered London stockmarket, Glencore has shelved plans for a New York listing.
However, AJ Bell head of financial analysis Danni Hewson argued that ‘rather than being a ringing endorsement of the merits of a UK listing, it may instead reflect the fact the company is not exactly in the best place to appeal to a new investor base elsewhere.’
EARNINGS SLIDE
After higher costs and various write-downs, Glencore’s net loss widened from $233 million (£175.5 million) to $655 million in the six months ended 30 June 2025, and on a tiny revenue uplift from $117.1 billion to $117.4 billion at that.
Weaker coal prices, lower copper volumes and operational challenges at certain mines dragged adjusted EBITDA (earnings before interest, tax, depreciation and amortisation) down 14% to $5.4 billion in the half, during which Glencore’s copper production fell 26% to 343,900 tonnes.
‘A comprehensive review of our industrial portfolio during the period has recognised opportunities to streamline our industrial operating structure, to optimise departmental management and reporting, and to support enhanced technical expertise and operational focus,’ commented Glencore CEO Gary Nagle.
This review also identified roughly $1 billion of recurring cost savings opportunities which Glencore expects to deliver in full by the end of 2026, with more than 50% already targeted for the end of 2025.
‘While there is much uncertainty around the impacts of geopolitics and trade in the shorter-term, we remain of the view that, in certain commodities, the scale and pace of required resource development will struggle to meet the demand projections for such materials into the future,’ insisted Nagle.
‘We are well placed to participate in bridging this gap, through the flexibility embedded in both our Marketing and Industrial businesses to respond to global needs.’
AJ Bell’s Danni Hewson observed that Glencore’s deepening losses were partly due to lower commodity prices, something outside the company’s control, but production was also lower, hinting at operational issues.
MOUNTING DEBT PILE
‘Unlike several of its peers Glencore has stuck with thermal coal and weakness in this market is not making that decision look too smart just at the moment,’ said Hewson.
‘There will also be concern about the company’s mounting debt pile. Glencore may well now have to channel more of its capital into improving the balance sheet rather than being able to reward shareholders as generously as it has in the past.
‘The company is looking to take significant costs out of the business and expects a big improvement in second half production - it really needs to deliver these efficiencies and this improvement in output to get the market back on side.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Steven Frazer) own shares in AJ Bell.
