Glencore PLC has released its preliminary results for 2023, reporting a healthy performance despite challenges in the international energy trade flows. The company's Marketing and Industrial segments delivered a Group Adjusted EBITDA of $17.1 billion, with cash generated by operating activities reaching $15.1 billion and net income attributable to equity holders at $4.3 billion.
The company managed its year-end net debt to $4.9 billion, maintaining a strong financial position with a Net debt/Adjusted EBITDA of 0.29x. Glencore recommended a $0.13 per share base cash distribution to shareholders for 2024, totaling approximately $1.6 billion. This distribution is part of the shareholder return journey and follows the significant announcement of the acquisition of Teck Resources Limited's steelmaking coal business, Elk Valley Resources (EVR), for $6.93 billion in cash.
The acquisition of EVR is expected to complement Glencore's existing coal production and support the transition to renewable energy infrastructure. It also paves the way for a potential demerger of the combined coal and carbon steel materials business, subject to shareholder approval.
Glencore has been managing its capital structure around a revised $5 billion net debt cap, with a focus on sustainable deleveraging and maintaining strong credit ratings. The company has returned $20.3 billion to shareholders since 2020, and while there are no top-up returns at this point, the business is expected to be highly cash generative at current commodity prices, indicating the possibility of top-up returns in the future.
In line with its focus on supporting the transition to a low-carbon economy, Glencore has made strategic investments in low carbon alumina units and expanded its copper resource inventory in 2023. The company remains committed to operating safely, responsibly, and ethically while creating sustainable long-term value for stakeholders.
The financial results for 2023 show a decrease in revenue and earnings compared to the previous year, largely attributed to market conditions. However, the company's strong diversified business model across industrial and marketing, focusing on metals and energy, has proven to be resilient in various market conditions.
Overall, Glencore's preliminary results for 2023 demonstrate a robust performance amidst challenges in the energy trade flows, strategic investments in transition commodities, and a continued focus on financial strength and shareholder returns.