Glencore PLC (LON:GLEN) shares fell Wednesday following the release of its Half-Year 2025 report, which detailed a decline in profitability due to weaker commodity prices and reduced copper production.
The report underscored the challenges facing the mining giant, even as it reaffirmed its commitment to shareholder returns through dividends and a substantial share buyback program.
Adjusted EBITDA fell 14% to $5.4 billion, while Industrial Adjusted EBITDA dropped 17% to $3.8 billion. This was primarily due to lower prices for both thermal and steelmaking coal, coupled with a decrease in copper production.
“Our copper business is currently navigating various temporary, but largely expected, operational factors, including mine sequencing, lower grades, water constraints and cobalt stockpiling,” stated Glencore's Chief Executive Officer, Gary Nagle.
Glencore shares are down close to 4% on Wednesday, trading around the 289.65p mark. For the year-to-date, the stock has declined by over 18%.
Marketing Adjusted EBIT also experienced a decrease, falling 8% to $1.4 billion. Despite the decline, Glencore characterized this performance as solid, given the challenging macroeconomic environment marked by US tariff policy uncertainty and geopolitical tensions in the Middle East.
Funds from operations (FFO) declined substantially, falling 22% to $3.2 billion, impacted by the lower Industrial Adjusted EBITDA and the timing of interest payments.
Despite the profit headwinds, Glencore is maintaining its commitment to returning capital to shareholders. The company will pay the second tranche of its base dividend of $0.05 per share in September. Furthermore, it is implementing a new share buyback program of up to $1 billion, bringing the total announced shareholder returns for 2025 to $3.2 billion.
Nagle, emphasized the company's strategic positioning to capitalize on future demand for essential commodities, stating, “While there is much uncertainty around the impacts of geopolitics and trade in the shorter-term, we remain of the view that, in certain commodities, the scale and pace of required resource development will struggle to meet the demand projections for such materials into the future.”
Heading into the earnings release, analysts at Citi raised their price target on Glencore to 370p from 350p, reiterating a Buy rating. Berenberg analyst Richard Hatch followed suit, increasing the firm's price target to 350p from 330p, also maintaining a Buy rating.
The upward revisions came after Barclays slightly trimmed its target, from 420p to 415p, maintaining an Overweight rating on the stock at the end of last week.
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