Glencore interim production shows mixed performance

Glencore (LSE: GLEN), the Switzerland-based miner and commodity trader, reported a varied performance across its commodity portfolio during the second half of its financial year. The company’s production figures for commodities such as copper, coal, gold, silver, zinc, nickel, cobalt, lead, and ferrochrome exhibited both positive and negative trends compared to the corresponding period last year.

Copper production for the first six months of 2023 amounted to 488,000 tonnes, down 4% from 510,200 tonnes during the same period in the previous year. Coal output experienced a 2% decline, reaching 54.2 million tonnes compared to 55.4 million tonnes in the previous year.

On the positive side, gold production saw a 10% increase, reaching 369,000 ounces, up from 334,000 ounces. However, silver production witnessed a 25% decrease, falling to 9.4 million ounces from 12.5 million ounces.

Cobalt production showed growth of 5%, reaching 21,700 tonnes from 20,700 tonnes. Zinc, on the other hand, experienced a decline of 10%, with production falling to 434,700 tonnes from 480,700 tonnes. Lead production was 8% lower, with 87,400 tonnes compared to 95,100 tonnes.

Ferrochrome production also decreased by 9%, reaching 717,000 tonnes, down from 786,000 tonnes. Nickel faced a more substantial decline of 20%, with production dropping to 46,400 tonnes from 57,800 tonnes.

Glencore’s Chief Executive, Gary Nagle, expressed satisfaction with the first-half production performance of the company’s underlying base business. He stated that key assets in copper, coal, and zinc performed in line with expectations and previously communicated guidance.

Despite the mixed results, Glencore maintained its annual production guidance unchanged. For 2023, the company projects a decline in copper production to 1.04 million tonnes from 1.05 million tonnes in 2022. Coal output is expected to remain flat at 110 million tonnes.

In terms of other commodities, cobalt production is estimated at 30,000 tonnes compared to 43,800 tonnes, while zinc is projected at 950,000 tonnes, up from 939,000 tonnes. Nickel production is expected to increase to 112,000 tonnes from 108,000 tonnes. However, ferrochrome is forecast to decrease to 1.31 million tonnes from 1.48 million tonnes.

In its Marketing segment, Glencore remains optimistic and continues to expect a full-year adjusted earnings before interest and tax (EBIT) to be above the top end of its long-term guidance range, likely reaching between $3.5 billion to $4.0 billion. In 2022, adjusted EBIT was $6.4 billion.

Glencore shares lost 0.7% to 469.05 pence each in London on Friday morning.

12-month change: decreased by 14%.