Trafigura Gross Margin Improves After Oil, Metals Volumes Climb
Dec. 8 (Bloomberg) — Trafigura Beheer BV, the world’s third-largest oil trader, said its full-year gross margin climbed after trading larger volumes of crude and coal.
Gross margin, a key measure of profitability for trading houses, rose to 1.6 percent from 1.4 percent, the Amsterdam- based company said today on its website. Net income fell 50 percent $1.08 billion in the 12 months through Sept. 30, after the sale of a stake in Puma Energy boosted profit a year earlier. Revenue declined 0.4 percent to $127.6 billion.
Trafigura has purchased stakes in pipelines, mines, smelters, ports and storage terminals to diversify its business and wring efficiencies from its trading operations. Jeremy Weir took over as chief executive officer of the 21-year-old commodity-trading house in March after co-founder Claude Dauphin stepped down to become executive chairman.
“This was a creditable performance in challenging trading conditions,” Weir said in the statement.
Trading volumes in oil and petroleum products increased 2 percent to 120.4 million metric tons. Volumes in minerals and metals soared 49 percent to 49.1 million tons as Trafigura became one of the three largest traders of coal.
In September, Trafigura completed the $86 million sale of an 80 percent stake in a Corpus Christi Texas port. That month, the company said it had applied to U.S. authorities to export lightly refined condensate. Divesting the port holding and selling its bitumen business to Puma generated pretax gains of $587 million, Trafigura said.
Ebitda Gains
“We built further on our leading position in a number of key commodities and at the same time realized a significant gain from our investment in Corpus Christi and continued our program of targeted investments in logistics and infrastructure in support of trade flows,” Weir said in the statement.
Full-year earnings before interest, taxes, depreciation and amortization rose 13 percent to $1.31 billion.
Banks including JPMorgan Chase & Co., Deutsche Bank AG and Barclays Plc have pulled back from or exited physical commodity trading amid weaker results and increased scrutiny from regulators. With a lighter regulatory burden, independent commodity traders such as Trafigura, Vitol Group and Mercuria Energy Trading Group Ltd. are filling the void.
Trafigura said last month it would soon begin voluntarily disclosing some payments to foreign governments for oil purchases. The decision to join the Extractive Industries Transparency Initiative by Trafigura marked a departure from the majority of other Swiss trading houses, which have so far elected not to join the program.
French bank BNP Paribas SA cut commodity trade finance to Trafigura, two people with knowledge of the matter said in September.
Trafigura said it added 22 new banks to its financing roster in 2014, bringing the total to 135 with combined credit lines of $46 billion. Long-term lending deals with producers in return for guaranteed supplies of commodities increased by $200 million and the company doubled its short term pre-payment portfolio to $2.3 billion.
To contact the reporter on this story: Andy Hoffman in Geneva at ahoffman31@bloomberg.net To contact the editors responsible for this story: Will Kennedy at wkennedy3@bloomberg.net Dylan Griffiths, Ana Monteiro
