Mining giant Glencore is considering a transfer of its primary stock market listing out of the UK, potentially dealing yet another major blow to London markets. Chief executive Gary Nagle told journalists on Wednesday the company wanted its shares traded on an exchange 'where we can get the right and optimal valuation', though he refrained from revealing a preferred market. It follows Unilever's decision to primary list and headquarter its ice cream division, home to Cornetto and Ben & Jerry's, in Amsterdam instead of London.
The UK capital has suffered an exodus of businesses in recent years amid concerns over liquidity and depressed valuations. A total of 88 firms either delisted or transferred their primary listing from the LSE last year, the highest number since the global financial crisis in 2009, according to auditor EY. Paddy Power owner Flutter Entertainment moved its main listing to New York, while tourism giant Tui switched to Germany, and foreign private equity companies bought Darktrace, Keywords Studios, and Hipgnosis Songs Fund.
Exit: Glencore's boss has warned that the firm could transfer its primary listing out of the UK. Should Glencore join the exodus, it would represent a significant blow to London markets, given the company is one of the largest FTSE 100 businesses by market cap at a whopping £40.3billion. Nagle's announcement comes as Glencore, which reportedly had talks with Rio Tinto about a possible merger, revealed its profits have shrunk for the second consecutive year.
The Swiss-based mining giant reported its adjusted earnings before nasties declined by 16 per cent to $14.4billion in 2024, having halved to $17.1billion the previous year. Meanwhile, the company's net income attributable to equity holders slumped from a $4.3billion profit in 2023 to a $1.6billion loss last year. Glencore shares became the FTSE 100 Index's worst performer on Wednesday morning after shrinking by 7 per cent to 328.8p.
Earnings in its energy coal arm more than halved to $3.2billion owing to lower prices and production levels, with the latter hit by mine closures in Australia, wet weather at the Cerrejon operation in Colombia, and rail capacity problems in South Africa. Glencore's copper output also fell by 6 per cent to 950,000 megatons during the year, partly due to 'unplanned mill downtime' at the Katanga copper mine in Congo.
Despite production issues, Glencore's annual turnover still increased by 6 per cent to $230.9billion, while funds from operations grew by 11 per cent to $10.5billion. Nagle said the firm had a 'strong year' operationally as he declared a $1billion 'top-up' share buyback along with about $1.2billion in dividend payments. Laith Khalaf, head of investment analysis at AJ Bell, said the buyback is 'an attempt to boost the stock, although not one which has immediately carried much weight with investors'.
He added: 'The fact the company’s profitability is dictated by volatile commodity prices, over which it has no control, is always likely to be an obstacle to a really premium valuation.'. Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
