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Free AccessBASIC INDUSTRIES: Glencore (GLENLN Baa1[P]/BBB+/NR): 1H24 Results
Coal assets will be retained, well flagged and not a surprise. We don’t see that as impacting credit with leverage low despite the uptick and strong cash flow from those high margin assets. ESG scores will be impacted however, which is a marginal negative for spreads.
- Glencore revenue was 2% better than expected.
- Adj. EBITDA was in line with consensus, 33% lower YoY on normalised energy trading conditions and lower thermal coal prices.
- FFO improved $300mn YoY while capex increased $400mn.
- Leverage is little changed at 0.3x despite the drop in EBITDA, with net debt also lower on reduced working capital. Proforma for the EVR transaction, with coal assets retained, this rises above 0.5x with net debt at $10.3bn. Glencore has set a new net debt cap at $10bn. It expects $1bn Viterra proceeds in the coming months.
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Why MNI
MNI is the leading provider
of intelligence and analysis on the Global Fixed Income, Foreign Exchange and Energy markets. We use an innovative combination of real-time analysis, deep fundamental research and journalism to provide unique and actionable insights for traders and investors. Our "All signal, no noise" approach drives an intelligence service that is succinct and timely, which is highly regarded by our time constrained client base.Our Head Office is in London with offices in Chicago, Washington and Beijing, as well as an on the ground presence in other major financial centres across the world.