19 February 2025
If you are covering Glencore's results and the fall in its share price, please see the following comment from Maurizio Carulli, energy and materials analyst at Quilter Cheviot:
"Despite issuing a set of results that were broadly in line with consensus at operating level this morning, Glencore’s share price has taken a hit in the hours since.
"The company’s marketing division had strong results, while its copper division was weaker. However, Glencore’s increase in net debt is noteworthy, having been negatively impacted by adjustments for its recent acquisition of EVR, as well as a working capital build.
"More importantly, and the element that the market appears to be focusing on, is that Glencore lowered its production guidance for 2025 and beyond. This is particularly focused on copper and zinc, partly reflecting weak market conditions. While Glencore is wise in not increasing production of its commodities given the weak pricing environment, the fact remains that 2025 is likely to be a challenging year.
"Glencore is also doing the right thing by resuming its buyback program, with $1 billion aimed to be executed by the summer.
"Mergers and acquisitions will continue to be a characteristic of the resources sector, and Glencore, which has historically been built on acquisitions, will likely continue to be involved it. This may be either as a buyer or as a seller, but the focus of any moves should be on creating shareholder value.
"Glencore is currently reviewing its primary listing location, and a shift to a New York listing is possible. If decided, this would unfortunately add to a long list of departures from the LSE in recent years."
