Glencore will return $2 billion to shareholders despite a dip in annual profits, the miner and commodity trader said today, reporting its 2025 results just weeks after a failed takeover bid from larger rival Rio Tinto.
Talks to create a $240 billion global mining giant were called off earlier this month over valuation and ownership differences, highlighting the challenges faced by diversified miners trying to scale up to meet rising demand for critical minerals.
Adjusted earnings before interest, taxes, depreciation and amortisation (EBITDA) fell 6% to $13.51 billion last year, the third consecutive decline for the London-listed and Swiss-headquartered group, following two record years.
The figure came above analysts' consensus estimate of $13.3 billion, though, and Glencore's shares were up 3.2% today and up around 19% so far this year.
"Despite a modestly lower year-on-year adjusted EBITDA outcome, the underlying momentum in H2 was clear," said chief executive Gary Nagle.
He said a 49% increase in core profits in the second half of last year reflected higher metals prices and improved production volumes, especially of copper.
Copper is critical for power, construction and the green energy transition and mining companies are competing to expand their production through organic growth and deals. Benchmark copper prices surged more than 40% last year.
Earnings, however, were dragged down by "energy and steelmaking coal prices," Glencore said.
Nagle, who has repeatedly argued consolidation was needed to bring more investment to the sector, said his views have not changed when asked about his position after the failed Rio Tinto deal.
"I do believe that consolidation can be good for our shareholders, and obviously, it can be good for the shareholders of any other company that we decide to do a transaction with," he told reporters.
Analysts at Deutsche Bank said that "the focus will be on the company's next strategic steps."
"We now know that management and key shareholders are willing to give up operational control and, in our view, a merger with a large peer remains an option," they said.
The announced $2 billion payout means shareholders will get 17 cents per share compared with 18 cents last year. The payout is made of a 10-cent base distribution coming from the 2025 cash flow and a 7-cent top-up supported by the rising value of Glencore's stake in agricultural trader Bunge.
The company's net debt was unchanged from 2024 at $11.2 billion, which included $1 billion of liabilities from marketing leases, and remained above its target of around $10 billion.
In July, Glencore began a review of its industrial assets to save $1 billion in costs by the end of 2026, which involved about 1,000 job cuts.
Since taking the helm in 2021, Nagle has divested or closed 35 operations raising $6.5 billion, and the company is now in talks to sell 40% of its copper and cobalt business in the Democratic Republic of Congo to a US-backed consortium.
Glencore said today it had finalised a land access agreement with the DRC's state miner Gecamines for its Kamoto Copper Company operations.
The agreement will extend the mine's life, improve productivity, reduce costs and secure long-term access to key ore zones previously restricted by ownership and licensing disputes.
Glencore will participate in Project Vault, a US initiative to stockpile critical minerals, Nagle also said.
The project has $10 billion in seed funding from the US Export-Import Bank and $2 billion in private investment, including international trading houses.
