Trafigura Group Pte Ltd (“Trafigura” or “the Group”), a market leader in the global commodities industry, released its 2023 Interim Report for the six-month period ended 31 March 2023. The results show continued strong demand for the Group’s services from a global customer base that relies on Trafigura to help secure access to vital resources in an increasingly complex world.
“This year marks the 30th anniversary since Trafigura was founded. In that time, we have built a global, resilient and successful business,” said Jeremy Weir, Trafigura’s Executive Chairman and Chief Executive Officer. “It is becoming increasingly clear that the shift to a low carbon economy is not going to happen without our industry. Our unique insights and expertise in managing global supply chains and developing new markets and investments in new supply of low-carbon fuels, such as hydrogen and key transition metals, mean that we are well placed to play a crucial role in this transition. At the same time, we also have a responsibility to provide energy and power to meet the needs of a growing global population.”
The Group’s strong performance for the period resulted in a net profit of USD5,544 million, more than double the figure of USD2,659 million registered at the same time a year earlier. The Group’s underlying earnings before interest, tax, depreciation and amortisation (EBITDA) rose 73 percent to USD8,136 million, up from USD4,713 million in the first half of 2022. Revenues were 23 percent lower at USD131,335 million, down from USD170,609 million. This was a result of lower average commodity prices and trading volumes.
Other highlights
• The Oil and Petroleum Products division delivered another robust performance, quickly adapting to changing market conditions and trade flows. They also secured an agreement to provide crude oil for ISAB, one of the biggest refineries in southern Europe, and to market the refined fuels it produces.
• The Natural Gas and LNG team had a strong half year providing security of supply to customers in a stressed market environment. This was highlighted by a long-term agreement to deliver a substantial amount of gas to SEFE, including a guarantee from the German Federal government export credit agency.
• Power trading activities continued to gain momentum and recorded a significantly higher profit during the period.
• There was also a strong contribution from the Shipping and Chartering division which deployed its fleet expertly in one of the strongest tanker markets in recent history to help Trafigura’s commercial teams and external customers. They also reduced the intensity of the fleet’s carbon emissions and are on track to meet long term environmental targets.
• In Metals and Minerals, the non-ferrous metals and bulk minerals division delivered a robust performance overall in challenging market conditions.
• Increased access to financing lines strengthened the Group’s ample liquidity buffer to manage potential future spikes of volatility in commodity markets. Total credit lines reached a level of USD75 billion, excluding Puma Energy, from a network of around 150 financial institutions.
• In January 2023, as part of wider sustainability commitments, Trafigura joined others in the First Movers Coalition with a pledge to purchase at least 50,000 tonnes of durable and scalable net carbon dioxide removal credits by the end of 2030 generated through advanced carbon dioxide removal technologies.
• During the first half of the year, Trafigura as part of a consortium signed a concession agreement with the Angolan government to refurbish and operate the 1,300km Lobito rail corridor, which offers a western route to market for crucial energy transition metals from the Copperbelt that is quicker and less carbon intensive than long-distance road transport.
• The acquisition was completed of the Stolberg multi-metals smelter in Germany, adding another strategic processing asset to Nyrstar’s portfolio of metals processing operations in Europe.
Outlook
“While we expect our supply chain management services to remain in demand during the second half of the year, we are seeing a return to more normal and calmer market conditions. Therefore, we expect the pace of our growth to slow compared to the previous 12 months,” said Trafigura Group Chief Financial Officer, Christophe Salmon. “We are also conscious that there are a growing number of headwinds, including inflationary pressures, higher interest rates and ongoing geopolitical tensions, which could impact global economic growth.”
