Zurich (AFP) – Swiss mining and commodity trading giant Glencore said Wednesday it was considering shifting its stock listing from London after it stumbled into a net loss last year on falling coal prices and writing down the value of assets. Meanwhile, with the threat of an all-out tariff war breaking out, the company said the uncertainty that creates is a short-term boon for its trading business but was not good in the long term for the global economy.
“We are actively considering the right exchange for our shares,” Glencore chief executive Gary Nagle said in a call with analysts after releasing its annual results. The company chose in 2011 to list on the London Stock Exchange, which was then considered the leading exchange for international mining groups. “We’re not saying that the London Stock Exchange is bad,” said Nagle. “What we’re saying is: is there a better stock exchange to trade our securities?” he added, acknowledging that “the US is the leading stock market”. The company’s shares were down around five percent in London, having pared some of their initial losses.
The company earlier Wednesday reported a $1.6 billion net loss for 2024 compared to a net profit of nearly $4.3 billion the previous year. The group took charges to write down the value in its accounts of its coal operations in South Africa, and the Koniambo nickel mine in New Caledonia. Accounting rules force companies to take such charges to reflect changes in the market value of their operations. Excluding such exceptional charges, the company said it would have posted a net profit of $3.7 billion. Nagle said in the statement that “operationally, 2024 was a strong year for Glencore” with its industrial mining operations meeting their performance targets.
Adjusted operational earnings from these operations came in at $10.6 billion, a drop of 20 percent from 2023, which the company said was “primarily driven by lower energy coal prices”. While mining rivals Rio Tinto or Anglo American have pulled out of coal mining, Glencore boosted its involvement in this market by buying Elk Valley Resources (EVR) from Canada’s Teck Resources for $7 billion last year. Glencore’s commodities trading business generated adjusted operational earnings of $3.2 billion, an eight percent drop from 2023 due to the “progressive normalisation of energy markets from the severe disruption and extreme volatilities seen in 2022/23”.
That disruption and extreme volatility in energy markets driven by Russia’s invasion of Ukraine helped Glencore post a record profit of $34.1 billion, allowing it to return $7.1 billion to shareholders in dividends. Despite the net loss, Glencore plans to distribute $2.2 billion to its shareholders via dividends and share buybacks. The group said it expects to receive in the coming months $1 billion in cash from the sale of its stake in Canadian grain handling company Viterra to Bunge, plus shares in the US-Swiss agribusiness.
Nagle said it is impossible to predict what will happen with tariffs, a day after Trump threatened 25 percent levies on autos. “What we do know is that uncertainty creates opportunity, uncertainty creates arbitrage options, it creates dislocation in the market, and when that happens we do well in our marketing business,” he said, referring to the commodities trading business. “Although maybe in the long term these sort of tariffs may not be so good for global growth, in the short term it raises our ability to get better returns out of our marketing business,” added Nagle.
© 2024 AFP
