Trafigura Group - 2023 Annual Results show a strong performance in constantly shifting marketsFriday December 08, 2023
Singapore, 8 December 2023 – Trafigura Group Pte Ltd (“Trafigura” or “the Group”), a market leader in the global commodities industry, today released results for its financial year ending 30 September 2023, showing a strong performance across the three core divisions of the Group – Oil and Petroleum Products; Metals, Minerals and Bulk Commodities; and Gas, Power and Renewables.
Net profit for the period increased five percent to USD7,398 million, up from USD7,026 million a year earlier, with strong underlying contributions recorded across all the Group. Exceptional earnings were achieved during the first half of the year as our teams provided valuable services to our customers in disrupted energy markets and captured opportunities in a volatile environment.
In the second half of the year, we continued to benefit from high demand for our services, despite the easing of supply chain disruptions and market volatility. These more normalised conditions have continued into our 2024 financial year.
Over the year, revenues dropped 23 percent to USD244,280 million, from USD318,476 million in 2022, reflecting lower average commodity prices.
Balance sheet and financing
Due to strong profitability, Group equity rose by nine percent to a record USD16,495 million, up from USD15,079 million, and has more than doubled since 2020, providing a solid base for further growth. This increase in equity was one of the drivers that maintained our financial leverage substantially below our medium-term target.
In terms of financing, while average utilisation was lower compared to 2022, total credit lines reached a level of USD75 billion, excluding Puma Energy, provided by a network of around 150 banks globally. This combination of a strong equity base, low leverage and ample liquidity is a point of competitive advantage, as commodity producers and consumers look to do business with reliable counterparties that have robust balance sheets and ready access to liquidity.
Metals, Minerals and Bulk Commodities had a strong year, generating an operating profit before depreciation and amortisation of USD1,601 million, down from USD1,877 million a year earlier. However, excluding the charge related to the nickel fraud, the division would have reported an operating profit of USD2,179 million, above its last three-year average level, supported by growing energy transition demand for copper, aluminium and other metals.
The Energy division, which includes Oil and Petroleum Products, as well as Gas, Power and Renewables, delivered another robust performance as customers turned to the Group to help reconfigure their supply chains in light of changing global trade flows and new regulations. Operating profit before depreciation and amortisation rose ten percent to USD11,143 million, on revenue of USD170,981 million.
As disclosed on December 6, the Group has been seeking to resolve investigations by regulatory authorities in the U.S., Brazil and Switzerland into payments made by former employees via third parties approximately 10 or more years ago.
Trafigura anticipates that the U.S. Department of Justice investigation into improper payments made in Brazil will be resolved shortly and is disclosing a provision of USD127 million, which will be made available to Trafigura Beheer B.V. (TBBV), the parent company during the period in question.
TBBV will defend itself at court against charges brought by the Office of the Attorney General in Switzerland for failing to prevent alleged improper payments in Angola between 2009-2011.
The performance of the Group in the second half of the 2023 financial year is more representative of the result that can be expected in 2024. However, markets and supply chains remain fragile and prone to turbulence linked to heightened geopolitical tensions, low stock levels and weak elasticity of supply that could change this outlook.
Jeremy Weir, Executive Chairman and Chief Executive Officer, said:
“As we look ahead we will continue to diversify our business with investments planned in renewable hydrogen, carbon removals and critical minerals.
“I believe that we have the people, global network and vision to make the most of the opportunities that lie ahead as the world decarbonises but still needs to provide energy to a growing global population. As a result, we approach 2024 with confidence in our prospects over the medium and long term.”
To watch a video interview with Jeremy Weir and Christophe Salmon, Group CFO about the annual results and to download a copy of Trafigura’s 2023 Annual Report click here.
For further information, please contact:
Trafigura’s Press Office: +41 (0) 22 592 4528 or email@example.com
Trafigura is a leading commodities group, owned by its employees and founded 30 years ago. At the heart of global supply, Trafigura connects vital resources to power and build the world. We deploy infrastructure, market expertise and our worldwide logistics network to move oil and petroleum products, metals and minerals, gas and power from where they are produced to where they are needed, forming strong relationships that make supply chains more efficient, secure and sustainable. We invest in renewable energy projects and technologies to facilitate the transition to a low-carbon economy, including through joint ventures H2Energy Europe and Nala Renewables.
The Trafigura Group also comprises industrial assets and operating businesses including multi-metals producer Nyrstar, fuel storage and distribution company Puma Energy, and our Impala Terminals joint venture. The Group employs over 12,000 people and is active in 156 countries.
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