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Timely decisions to seize market volatility increases Trafigura y.o.y. profits by 27%

12 Jun 2020

Singapore-based commodities company Trafigura Group Pte Ltd. on Thursday (11 June) posted a profit for the first half of its 2020 financial year from 1 October 2019 to 31 March 2020 (H1 2020).

It reported a 27% increase in net profit of USD 426 million in H1 2020 when compared to USD 542 million in H1 2019.

Group revenue at USD 82.96 billion in H1 2020 was slightly down from USD 86.30 billion H1 2019 due to lower average commodity prices.

The Oil and Petroleum Products division delivered its strongest first-half profit performance, it said.

The Shipping and Chartering business also delivered a very strong performance having positioned itself strategically with an increased fleet and a sizable equity position to benefit from the expected IMO 2020 market disruption, which did materialize, noted the company.

Opportunities for geographical arbitrage were amplified by the uneven impact of the pandemic in regions, while the introduction of IMO 2020 regulation on marine fuel created additional volatility in the markets for fuel oil and condensates. 

All these factors subsequently increased the need for our services and significantly boosted profit margins in oil trading as well as in our Shipping and Chartering operations, it explained.

The company also reported a strong start to operations of TFG Marine, the new joint venture with ship-owners Frontline Ltd. and Golden Ocean Group Ltd., which aims to build a significant share in a consolidating global bunker fuel market.

“At times like these, the physical trading and risk management activities of specialist companies such as Trafigura become more relevant than ever,” said Christophe Salmon, Trafigura’s Group CFO.  

“Our core competence lies in understanding the global supply chain in great detail, in having highly skilled trading teams and in managing infrastructure such as oil storage facilities, pipelines and freight capacity.  

During this period, our market intelligence on the impact of COVID-19 and of the decisions by OPEC and other oil producers on demand and supply, enabled us to act efficiently and effectively.”


Photo credit: Trafigura Group Pte Ltd
Published: 12 June, 2020

 

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