Swiss-based commodities giant Glencore said Wednesday that lower energy prices cut into its 2023 profits as it slashed its dividend to pay for an acquisition.
The group, which saw 2022 earnings leap as Russia’s invasion of Ukraine sent raw material prices soaring, said last year’s net profit fell 75 percent to $4.3 billion.
Gross operating profit fell 50 percent to $17.l billion, “primarily reflecting the rebalancing and normalisation of international energy trade flows,” it said in a statement.
The commodities trading unit saw operating profit fall 46% to $3.5 billion, “with coal and LNG (liquefied natural gas), and to a lesser extent, oil prices materially declining.”
Operating profit from mining fell 52% to $13.2 billion.
Advertisement – Scroll to Continue
Glencore proposed cutting is dividend to $0.13 a share from $0.40, following its recent agreement to pay $6.9 billion in cash for a 77 percent stake in Elk Valley Resources (EVR), which groups the coal activities of Canadian company Teck Resources.
Teck rejected Glencore’s initial advances before finally agreeing to a higher price. Glencore said Wednesday it expects regulatory approval for the takeover by the third quarter of 2024.
The company, which has been criticised for its continued investments in fossil fuel activities, said it will present an updated “climate action transition plan” to shareholders this year.
Advertisement – Scroll to Continue
“As the world moves towards a low-carbon economy, we remain focused on supporting the energy needs of today whilst investing in our transition commodities portfolio,” the company said.
“The strength of our diversified business model, across industrial and marketing, focusing on metals and energy, has again in 2023 proved itself adept in a range of market conditions.”
noo/er/gv/tw
