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Trafigura’s profits tumbled by more than 70 per cent even as it reported its fourth-best performance on record in a sign of an end to the extreme market volatility that has boosted the earnings of commodity traders.
Net profit in the six months to the end of March was $1.5bn, down from $5.5bn in the first half of 2023 and $2.7bn in the same period in 2022, Singapore-registered Trafigura said. Its financial year ends in September.
The drop follows a period of record earnings for the world’s biggest traders, who all profited from the disruption in commodity markets triggered by Russia’s full-scale invasion of Ukraine in February 2022.
Founded by its former French chief executive Claude Dauphin in 1993, Trafigura has evolved from a scrappy, secretive trader into one of the world’s most important commodity companies, with business in 150 countries and assets ranging from mines and ports to energy infrastructure.
Chief financial officer Christophe Salmon said “more normalised market conditions” had returned but stressed that it still ranked as Trafigura’s fourth-highest first-half profit.
“In the frame of our 31-year history, we can qualify this semester as very strong,” he said.
Although turnover fell to $124.2bn from $131.3bn in the first half of 2023, due to lower commodity prices, Trafigura traded 15 per cent more oil and gas year-on-year, mainly by suppling more crude to European refineries, it said.
Record profits have helped more than double Trafigura’s total group equity since 2019 and it rose again in the past six months to $17.3bn at the end of March from $16.5bn in September.
Salmon, who has served as finance chief for almost 10 years, will retire in June and be replaced by the company’s CFO for Asia, Stephan Jansma.
The prolonged period of elevated commodity prices has led to payment problems with some customers. The proportion of invoices more than 60 days overdue has risen from 5 per cent at end of September to almost 16 per cent at the end of March.
“If you look at commodity prices where they are today, they are not the lowest so that means that importing countries from time to time will have issues in their payment profile . . . and hence it is logical that we have more overdue,” Jansma said.
Salmon’s exit coincides with a wider changing of the guard at the top of the trading house. Trafigura reshuffled its senior team last year and executive director Jose Maria Larocca, who has helped run the business since 2007, is also leaving in September.
Chief executive Jeremy Weir has no immediate plans to retire but in April told the Financial Times that his successor would need to have a broad set of skills and would not be picked based on which trader was making the most money for the business.
Trafigura also confirmed it had settled a case with billionaire property magnates the Reuben brothers, which was linked to an alleged $600mn nickel fraud that rocked the commodity trader last year.
The British pair had made claims for $8.4mn. Trafigura declined to comment on the size of the settlement.
Additional reporting Harry Dempsey
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