Glencore Earnings: Down but Still Strong, Driven by Lower Coal Prices, Reduced Marketing Revenue

No-moat Glencore’s 2023 first half profit fell by roughly 60% compared with the first six months of 2022, but broadly met our expectations. Adjusted EBITDA of USD 9.4 billion was down 50% on last year driven by lower thermal coal prices, reduced sales volumes, and higher unit cash costs in its industrials business and reduced marketing earnings. The latter was due to lower commodity price volatility and as supply chains normalize in the wake of the Russia-Ukraine war. Glencore’s balance sheet remains strong with minimal net debt after netting out debt secured by highly liquid commodity marketing inventories.