The FTSE 100-listed miner Glencore PLC (GB:GLEN) cut its dividend after its profits for 2023 nosedived due to lower energy prices. The company announced a significant reduction in its 2024 dividends to reduce its debt and maintain liquidity. GLEN shares traded down by 1.17% on Wednesday, leading to a year-to-date loss of over 17%.
Glencore is a prominent player in the mining industry, known for its extensive production of various metals and minerals, including copper, nickel, alumina, and iron ore.
Insights from Glencore’s Results
Glencore’s revenue for the full year 2023 declined 15% to $217 billion compared to last year. Adjusted EBITDA fell significantly by 50% to $17.1 billion. This was mainly attributed to the stabilization of global commodity markets following the exceptional earnings spurred by the spike in energy prices due to the conflict in Ukraine.
The net income attributable to equity holders declined by 75% to $4.3 billion, reflecting impairment charges related to the Mutanda cobalt operation and other zinc assets.
As a result of lower earnings, Glencore reduced shareholder returns for 2024 to $1.6 billion (only dividends, no buybacks) from $10.1 billion (including dividends and share buybacks) last year. The company’s 2024 returns comprise a dividend of $0.13 per share. Glencore’s move to slash its shareholder returns also coincides with the finalization of the $6.9 billion acquisition of Teck Resources’ (NYSE:TECK) steelmaking coal division.
Is Glencore a Good Share to Buy Now?
Overall, analysts had a bullish take on the stock following the results. Analysts at RBC Capital, Jefferies, and UBS maintained their Buy ratings on the stock, while Ian Rossouw from Barclays reiterated his Hold rating.
According to TipRanks, GLEN stock has a Moderate Buy consensus rating based on a total of nine recommendations. It includes four Buy and five Hold ratings. The Glencore share price forecast is 500.0p, with a high forecast of 560p and a low forecast of 400p. The price target implies an upside of 30% on the current trading levels.
