Glencore weighs ditching London as primary listing

Glencore (LON: GLEN) is considering shifting its primary listing from London, likely to New York, or another venue where it can “get the right valuation” in a potential blow to the London Stock Exchange.

Chief executive Gary Nagle said the miner and commodity trader, which has been listed in London since 2011, was evaluating whether another exchange might be better suited for trading its securities.

“We want to ensure that our securities are traded on the right exchange, where we can get the right and optimal valuation,” Nagle said on a call Wednesday morning. “If there’s a better one, and those include the likes of the New York Stock Exchange, we have to consider that.”

The London Exchange has been hit by a string of high-profile departures in recent years. Glencore, with a market capitalization of £40 billion ($50 billion), is among the 20 most valuable companies listed in London and would be the largest yet to exit the exchange.

Last year, 88 companies delisted or transferred their primary listing from London’s main market with only 18 taking their place, according to the exchange.

BHP (ASX: BHP), the world’s largest miner, switched to a secondary London listing in 2022.  Fellow Australian miner Rio Tinto (LON, ASX: RIO) is facing pressure from investor Palliser Capital to move its primary listing from London to Sydney. The world’s second-largest mining company has launched a review of its options. 

Glencore had previously planned to spin off its coal business and list it in New York, where it believed market conditions would be more favourable. Data from Deutsche Bank indicates that about 48% of mutual funds in Europe exclude coal investments, compared with less than 1% in the United States. However, the Baar, Switzerland-based company shelved that plan last year and decided to retain its coal assets within the group.

Nagle said the review had nothing to do with the new US administration or its policies on fossil fuels.

“We’re looking at all relevant exchanges that would make sense for Glencore,” Nagle said.

Loss and dividend

The announcement of a possible listing switch came as Glencore reported a $1.6 billion loss for 2024, a sharp contrast to the $4.3 billion net income it reported the previous year. 

The loss stemmed from several impairments, including a $1.5 billion write-down on zinc and copper smelting assets and a $600 million impairment on its South African coal operations.

Revenue for the full year 2024, however, increased by 6% to $231 billion. Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) in 2024 declined 16% to $14.4 billion.

“Although unadjusted earnings included some large impairments, Glencore announced higher-than-expected shareholder returns of $2.2 billion,” BMO analyst Alexander Pearce wrote in a note to investors.

This implies an annualized yield of 4.1% and reflects $1 billion from the imminent closure of the Viterra sale.

Looking ahead, Glencore’s overall guidance remains broadly in line through 2027, though copper production volumes in 2025 may fall short of expectations, Pearce noted.