One of the largest independent commodity traders Gunvor Group posted a record gross profit of US $4.881 billion and net profit of $2.36 billion for 2022. Gunvor joined other leading traders with record profits, capitalizing on arbitrage opportunities with the volatility since Russia invaded Ukraine. Trafigura Group reported a record profit for 2022 of $7 billion, Vitol Group $15 billion and Mercuria Energy Group $2.98 billion.
Gunvor released the results on the Euronext exchange Wednesday noting a strong performance across all trading desks and was broad-based across all geographies and all desks, including refining and shipping. The net result includes legal provisions and an impairment related to a minority, non-controlling investment in the Ust-Luga Oil Products Terminal in Russia
“This unique economic and market situation benefited commodities traders,” Gunvor said in its results.
Gunvor is led by Swedish billionaire co-founder Torbjorn Tornqvist. The group maintained a “restrictive dividend policy” and increased its equity by 72% over the course of the year to $5.29 billion,
Highlights
- Revenue: US $150 billion
- Volumes: 165 million MT
- Gross profit: US $4.881 billion
- Net profit after taxes: US $2.359 billion
- Equity: US $5.286 billion
Equity spiked to a record $5.286 billion in 2022 from $3.079 billion a year earlier on reports Gunvor was in talks with strategic investors, including the UAE’s Abu Dhabi National Oil Co (Adnoc), to sell a stake according to industry sources. Gunvor CEO Torbjorn Tornqvist has said it is “no secret” the pair were in contact.
The extreme volatility also saw margins explode which effectively limited profits, losses and ensured tighter risk management and profit taking. Gunvor’s trading volumes drop 31% to 165 million tons from 240 million tonnes in 2021, as it pulled back from spot trading in European natural gas and crude oil.
“The performance was broad-based across all geographies and all desks, including refining and shipping,” Gunvor said in a statement.
Ecuador, Antwerp and Ust-Luga Oil Products Terminal in Russia Impairments
A former Gunvor employee pleaded guilty in 2021 to what U.S. federal prosecutors called a scheme to bribe Ecuadorean government officials to win business from state-controlled oil company Petroecuador. The U.S. Department of Justice and Commodity Futures Trading Commission have continued investigating the firm and Gunvor expects to pay a fine.
In a filing on Wednesday, Gunvor said it booked a $200 million provision for the Ecuador case.
The company’s results include a $200 million provision “related to the current investigation by the US Department of Justice in connection with transactions in Ecuador.”
The $200 million is in addition to a total $501 million impairment on its Ust-Luga oil terminal in Russia and a recently sold refinery in Antwerp.
It has been reported the energy sector’s strong performance has carried over to the new year, with commodities trader Trafigura beating its previous record to make around $3.5 billion in profit in its first fiscal quarter.
About Gunvor Group
Gunvor Group is one of the world’s largest independent commodities trading houses by turnover, creating logistics solutions that safely and efficiently move physical energy and bulk materials from where they are sourced and stored to where they are demanded most. Gunvor has strategic investments in industrial infrastructure—refineries, pipelines, storage and terminals—that complement our core trading activity and generate sustainable value across the global supply chain for our customers.
Source: Gunvor
From The TradersCommunity News Desk