Trafigura’s annual results deliver a strong commercial and financial performance
Singapore, 14 December 2015 - Trafigura, one of the world’s largest commodities trading firms, has today announced results for the year ended 30 September 2015. In commodity markets characterised by upheaval, over-supply and volatile trading conditions, Trafigura delivered a strong commercial and financial performance and its best trading year on record.
After taking account of investment gains and write-downs, net profit reported by Trafigura Group Pte Ltd., the new consolidated reporting entity for the Group*, was USD1.103 billion, an increase of 6.5 percent from USD1.036 billion in 2014. Gross profit was USD2,600 million, an increase of 28 percent over USD2,035 million in 2014. This represented a gross margin of 2.7 percent compared to 1.6 percent in 2014, reflecting a strong trading performance and continued progress in delivering operational efficiency.
The company reported profitable volume growth in both trading divisions, Oil and Petroleum Products and Metals and Minerals. The volume of commodities traded by both divisions combined increased 17 percent from 169.5mmt to 198.4mmt.
“The year provided ample opportunities for Trafigura to demonstrate the strength and robustness of a business model built to thrive in turbulent market conditions,” said Jeremy Weir, Trafigura’s Chief Executive Officer. “Trafigura is well positioned to cope with distressed markets and to seize new opportunities, thanks to our focus on both oil and metals and minerals trading, our sound finances, strong liquidity and careful risk management.”
Volumes traded by Oil and Petroleum Products increased by 22 percent from 120.4mmt to 146.3mmt. The division now trades well over 3 million barrels a day, compared to a daily average of 2.5 million barrels in 2014. Volumes traded by Metals and Minerals increased by 6 percent from 49.1mmt to 52.1mmt despite the challenging environment due to the slowdown in Chinese economic growth and industrial demand.
Revenue in 2015 totalled USD97.2 billion, a decrease of 23 percent from USD126.2 billion in 2014. This reflected the sharp decline in commodity prices across the board compared with the previous year, and came despite significant volume increases.
Trafigura took significant impairments to the value of a number of its industrial and logistical assets to reflect the impact of adverse market conditions, notably in bulk commodities. Impairments to non-financial assets totalled USD407 million. The impairments reflect distressed conditions in commodity markets and their likely impact on the company’s assets.
Partially offsetting the impairments was a gain of USD142 million from the sale of a 50 percent stake in the MATSA mine to Mubadala Development Company, with an additional gain of USD148 million recorded as a result of re-valuing Trafigura’s retained 50 percent interest in MATSA at fair value.
This is the first set of annual accounts prepared with Trafigura Group Pte Ltd., a Singapore-registered company, as the consolidated reporting entity. This is the last stage in a corporate reorganisation that began in 2012 but has no financial impact.
In accordance with Singapore law, a new unitary Board of Directors has been established for Trafigura Group Pte Ltd to oversee the Group, including a Supervisory Committee which takes on the duties previously undertaken by the Supervisory Board. Sipko Schat, a former member of the Executive Board and head of the Wholesale Clients Division of Rabobank Nederland, will join the Board and the Supervisory Committee in January 2016, while Lord Thomas Strathclyde and Eric de Turckheim are stepping down at the end of the calendar year. Lord Strathclyde remains on the Board of Galena Asset Management.
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Notes to editors
Founded in 1993, the Trafigura Group has become one of the world’s leading independent commodity traders, specialising in the oil, minerals and metals markets. The company has achieved substantial growth in recent years, growing revenue to USD97.2 billion in 2015. Primary trading activities are the supply and transport of oil and petroleum products and metals and minerals. The trading business is supported by industrial and financial assets including global oil products distribution company Puma Energy; joint venture company DT Group; global terminals operator Impala; Trafigura’s Mining Group and Galena Asset Management.
The Trafigura Group is owned by 600 of its 5,300 employees who work in 37 countries around the world. The Group has been connecting its customers to the global economy for more than two decades, growing prosperity by advancing trade.
*The consolidated financial report for the year ending September 30, 2015 is the first to be prepared with Trafigura Group Pte. Ltd. (“TGPL”), a company registered in Singapore, as the consolidating entity. Prior to this date, Trafigura Beheer B.V. (“TBBV”), a Dutch registered company was the main consolidating entity for the Group. This change is the last stage in a process that commenced in 2012 when another Singaporean entity, Trafigura Pte Ltd., became the main corporate entity for the Group’s global trading activities. This final stage completes the process and fully establishes Singapore as the default legal jurisdiction for all of the Trafigura Group businesses. It is also an important step in creating greater consistency across the Group’s structure and in aligning reporting structures and business activities in Singapore, the regional hub for our business activities in the Asia-Pacific region.
All the numbers in the Annual Report for both 2015 and 2014 fiscal years refer to TGPL; the 2014 numbers cited here therefore differ from the numbers in Trafigura’s 2014 Annual Report, issued when TBBV was the reporting entity.