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Sept. 26 (Bloomberg) -- Gunvor Group Ltd. said first-half profit dropped 6 percent as the commodity trader posted its first set of financial results without sanctioned Russian billionaire Gennady Timchenko as an owner.

Net income fell to $152.8 million in the six months through June, from $162.6 million a year earlier, the firm with its headquarters in Cyprus and main trading activities in Geneva said today in an e-mailed statement.

While trading volumes climbed 16 percent to the equivalent of 71 million metric tons of oil as Gunvor added metals to its portfolio, the company said earnings declined because of asset depreciation and the cost of increased borrowing. Timchenko sold his 44 percent stake to Swedish co-founder Torbjorn Tornqvist in March, the day before the U.S. imposed sanctions alleging close ties to Russian President Vladimir Putin.

“While we had to manage certain particular challenges during the first half, Gunvor continues to diversify and expand globally to find available opportunities in new trading and assets,” Chief Executive Officer Tornqvist, who controls 87 percent of the company and 100 percent of its voting shares, said in the statement.

Tornqvist said in March that U.S. sanctions against Timchenko raised questions with some of Gunvor’s counterparties who briefly stopped trading with the firm as they waited to be sure of its status. While the U.S. Treasury Department said on March 20 that “Putin has investments Gunvor,” the company has denied any ties to the Russian president. Gunvor wasn’t sanctioned.

Loan Facilities

Earnings before interest, taxes, depreciation and amortization rose 12 percent to $395 million, the world’s fifth- largest independent oil trader said. Gunvor’s revenue was little changed at $45 billion

Since sanctions were imposed on Timchenko, Gunvor has added or refinanced more than $1.7 billion of loan facilities. The firm started trading iron ore this year and paid A$5 million ($4.4 million) for a stake in Ascot Resources Ltd., which is developing an iron ore project in Australia.

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

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