Glencore sticks to acquisition trail as earnings halve

Focus on investing in transition metals

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Sets $2 billion aside for Teck-related M&A

LONDON, Aug 8 (Reuters) - Glencore said it remains on the hunt for acquisitions, including a possible partial or full takeover of Canada's Teck, even as it reported a halving in earnings for the first half of the year on Tuesday and slashed shareholder payouts.

The Swiss miner and trader joined rivals Rio Tinto , Teck Resources and Anglo American in reporting lower profit and returns as economic growth remained lacklustre. But it was still optimistic on prospects for China, the world's largest commodities consumer.

"It may not be the bonanza that everybody was expecting, but China is not all that bad," CEO Gary Nagle said of China, which on July 24 pledged more support for its slowing economy.

Glencore's adjusted core earnings, or earnings before interest, tax, depreciation and amortisation (EBITDA), fell to $9.39 billion in the six months through June, from $18.92 billion a year earlier. Analysts at Deutsche Bank had expected $9.9 billion, while Citi's estimate was $11.4 billion.

"While today's results were disappointing, we continue to like Glencore based on its commodity mix, valuation, and aggressive approach to strategically sensible and value-enhancing M&A," Jefferies analysts said.

London-listed Glencore announced additional returns of around $2.2 billion, including a $1 billion special dividend and a $1.2 billion share buyback programme that will run until February 2024.

This compared to an additional $4.5 billion in the same period of 2022, including a $1.45 billion special dividend and a $3 billion share buyback.

Glencore's shares were down 3.4% by 1006 GMT, to their lowest level since July 11.

DEALS

M&A remains firmly on the commodities giant's agenda, after selling more than 20 non-core assets to focus its portfolio on the minerals needed to power the green energy boom.

"As the world moves towards a low-carbon economy, we remain focused on supporting the energy needs of today whilst investing in our transition metals portfolio," Nagle said.

Glencore in June offered to buy Teck's coal business as a standalone unit, having been rebuffed twice in its $22.5 billon bid to combine the two companies. On Tuesday, it said it had set aside $2 billion in cash if the deal succeeds.

As part of the proposed deal, Glencore would spin-off and merge its thermal coal business with Teck's steelmaking coal one to form a separate New York-listed company.

In July, the London-listed miner agreed to buy out its partners in Argentine copper project MARA, acquired the stake it did not already own in U.S.-based PolyMet, bulking up on copper and nickel. It has also said it would spend about $700 million for equity stakes in some assets from Norwegian aluminium producer Norsk Hydro.

"We haven't seen anything near the size (of Teck) in terms of materiality, it has been more working M&A in the $2 billion here and there," Chief Financial Officer Steven Kalmin said, in reference to other possible acquisition targets.

"It would have to be multiple billions for us to be thinking that some reservation was appropriate, it's always easier to do it (M&A) when there's a live situation with some market knowledge." (Reporting by Clara Denina and Pratima Desai; Editing by Kirsten Donovan and Alexander Smith)