Trafigura Group Pte Ltd one of the world’s leading independent commodity trading companies, has announced another year of strong trading and financial performance. During a year characterised by great volatility across the commodity sectors and intense competition in energy markets Trafigura achieved a strong financial performance in aggregate. Net profit for the financial year was USD 873 million, a decrease of less than 2 percent from the figure of USD 887 million in 2017. Gross profit was 6 percent higher at USD 2.4 billion, compared to USD 2.2 billion in 2017, again underlining the benefits of a business model built on trading two different and largely uncorrelated groups of commodities.
The largest component of profit was generated by the Metals and Minerals Trading division in one of its best years, generating gross profit of USD 1.4 billion, up 24 percent from USD 1.1 billion in 2017. Oil and Petroleum Products Trading’s contribution to gross profit fell by 10 percent to USD 1 billion as a result of the switch from the contango to backwardated oil pricing structure. A timely and radical restructuring of the Oil and Petroleum Products Trading books enabled a material improvement in this division’s profitability by the final quarter.
In addition to the trading performance, a further contributor to pre-tax profit was a gain on divestment of subsidiaries, amounting to USD 191 million, following the investment by global fund manager IFM Investors in a newly formed joint venture holding a collection of infrastructure assets previously wholly-owned by the company’s subsidiary Impala Terminals. This showed the company’s ongoing capacity to generate returns from investment in infrastructure assets related to commodities flows.
Mr Jeremy Weir, Trafigura’s Executive Chairman and Chief Executive Officer said that “During Trafigura’s 25th anniversary year the company once again demonstrated the resilience of its business model, while expanding the provision of services to its global roster of clients. Benefiting from our global scale and disciplined approach, we increased overall volumes traded and generated a profit comparable with the previous year from trading and from our asset investment strategy.”
