Trafigura half year result show core business strength

(Posted on 07/06/24)

Trafigura Group Pte Ltd, a market leader in the global commodities industry, has released its 2024 Half Year results for the period ended 31 March 2024.

"The strength of our business was evident with robust performances from our core divisions," said Jeremy Weir, Trafigura’s Executive Chairman and Chief Executive Officer. “In a less stressed environment than the same period a year ago, demand for our services remained strong and we recorded a net profit that was one of our best first half year results on record.”

The six months to the end of March of 2024 saw a continuation of the less turbulent conditions that prevailed during the second half of the 2023 financial year. Revenue fell five percent to USD124,197 million, reflecting the impact of lower commodity prices, partially offset by higher trading volumes. The Group reported underlying earnings before interest, tax, depreciation and amortisation (EBITDA) of USD4,284 million compared to USD8,136 million in 2023. The solid performance in the first half of 2024 demonstrates the Group's ability to adapt to changing market dynamics.

The Group recorded a net profit of USD1,474 million, one of the best first half results on record. There were robust performances from all of our core divisions –Metals and Minerals, Oil and Petroleum Products, Gas Power and Renewables – as well as shipping.

Demand for the Group’s services remained high as customers continued to rely on Trafigura to navigate complex markets. Oil and Petroleum Products,

Total traded volumes of oil and petroleum products, including natural gas and LNG, were 7.2 million barrels per day, around 15 percent above the previous year’s level. This was mainly due to higher trading volumes in crude oil, driven by our supply and marketing agreements with refineries in Europe.

The period was not without its challenges as Nyrstar’s metals processing operations continued to face lower commodity prices and high energy costs, together with significant global competition.

Group equity was in excess of USD17 billion at the end of March 2024, providing a solid base for investments that will help the Group benefit from and contribute to a changing global energy system. These include the planned purchase of the European assets of Greenergy, a UK based supplier of road fuels and a major producer of biodiesel, as well as its Canadian supply operations. These acquisitions, which are subject to regulatory approval, will help strengthen Trafigura’s fuel supply operations and add physical production of renewable fuels to the growing biofuels business.

In Africa, Trafigura is part of a consortium that has been awarded a 30-year concession to operate a 1,300km rail corridor and mineral port in Angola. The Lobito Atlantic Railway offers a more efficient and competitive route to market to the Atlantic coast of Africa for minerals and metals produced in the Copperbelt region. The consortium’s investment programme has commenced with major contracts signed for the acquisition of rolling stock and infrastructure.

In battery metals, Trafigura has agreed to invest in a new state-of-the-art nickel refinery that Korea Zinc is building in Ulsan, South Korea, while also supplying feedstock to the plant and marketing a portion of its production. Another highlight of the 2024 half year period was an agreement to purchase carbon dioxide removal credits from a new direct air capture facility currently under construction in Texas.