We have the confidence to invest because we believe in long-term growth and in the far-reaching efficiencies that a large-scale, independent player such as Trafigura can bring to the marketplace.
The Trafigura Group’s business model and service proposition are founded on three simple and related insights. First, that over time, global trade in fossil fuels and industrial raw materials will continue to grow, driven by the trends of industrialisation, urbanisation and increasing prosperity that continue to spread across the developing world. Second, that this expanding demand creates a need for a new type of commodity trading firm able to operate at scale with the financial resources and sophisticated information and risk management systems to match. Third, that success in this business requires a genuinely long-term focus on customer needs and on new ways of connecting supply with demand – with a readiness to invest in everything from long-term client relationships to processes, logistics and infrastructure in support of trade flows.
FOCUS ON LONG-TERM GROWTH
The financial year we have just completed provided validation of all three of our guiding principles. First, trading volumes continued to grow in our two trading divisions, Oil and Petroleum Products, and Metals and Minerals. Our share of the freely traded oil and products markets continued to expand; we saw a sharp increase in coal volumes; and even in commodities where we have a particularly strong position such as refined metals, we were able to develop the book.
Statement from Jeremy Weir, Chief Executive Officer
Through continuing profitable growth and investment, we are creating a company that is not only robust and responsible – but also nimble, flexible and adaptable.
For Trafigura, 2014 was a year of broadening and deepening. The Group broadened its activity through profitable volume growth in both trading divisions; by expanding newer business lines as well as long-established ones; by entering new territories from Brazil to Papua New Guinea; and by exploring and executing new investment projects in infrastructure and logistics. It deepened its capacity by further strengthening its balance sheet, equity base and credit worthiness; by realising significant value from its investments; and by further demonstrating the resilience of a business model based on independence and efficient use of capital.
GROWING VOLUMES IN A COMPETITIVE MARKETPLACE
Revenue in 2014 totalled USD127.6 billion, a decrease of 0.4 percent from the figure of USD128.1 billion recorded in 2013 on a like-for-like basis. The like-for-like comparison excludes in both years significant divestments of previously consolidated subsidiaries and the related revaluation gains following their deconsolidation. On this basis, gross profit rose by 14 percent to USD2,045 million from USD1,788 million in 2013. EBITDA (earnings before interest, tax, depreciation and amortisation) was USD1,309 million, compared to USD1,155 million the previous year, a like-for-like increase of 13 percent.
Financial Review from Pierre Lorinet, Chief Financial Officer
Operating performance of the Group increased year-on-year, and the 2014 result reflects continued profitable growth in volumes in both trading divisions.
The Trafigura Group recorded solid financial performance in 2014, with net profit for the year of USD1.080 billion, a decrease of 50 percent from the figure of USD2.181 billion in 2013. The decrease in the headline number is mainly due to the deconsolidation of Puma Energy that occurred at the end of 2013. In fact, the operating performance of the group has increased year-on-year. The 2014 result reflects continued profitable growth in volumes in both trading divisions.
Main highlights of the year in our industrial divisions included the acquisition by Impala Terminals, together with Mubadala, of a controlling interest in the Porto Sudeste iron ore export facility in Brazil; the completion of a number of other important investment projects, including a strong increase in capacity at our MATSA mine in Spain, a significant expansion of Impala Terminals’ warehouse and export terminal at Callao in Peru and completion of the development phase of our multimodal transport project in Colombia; and the sale of an 80 percent interest in our Corpus Christi terminal.