Trading giant Trafigura bets heavy on Africa
* Continent responsible for quarter of revenues
* Big growth story but risks high too
* African business first to be floated
By Dmitry Zhdannikov
LONDON, Jan 31 (Reuters) - Trafigura relies on Africa for almost a quarter of its revenues, the commodities giant has revealed, highlighting one of the highest risk appetites in the industry as it prepares to float a chunk of business.
Trafigura told its bond holders Africa generated $29 billion worth of revenues in 2012 out of a total of $120 billion.
Africa came only slightly behind Asia with $31 billion, with Europe coming third with $20.7 billion. North America generated $16 billion, Latin America $14 billion and the Middle East $8.7 billion, sources familiar with the report told Reuters.
Trafigura declined comment.
The company was founded 20 years ago by Claude Dauphin, one of the closest allies of the godfather of contemporary oil trading Marc Rich.
Rich's company Marc Rich and Co ultimately transformed itself into trading giant Glencore following a management buyout.
Just like Glencore before its record initial share offering two years ago, Trafigura reveals its results only to a limited number of bond holders.
Trafigura is preparing to float its Africa-focused subsidiary Puma. The share of African business in its results is therefore important as it could give a hint of how much Trafigura - also expected by market players to go public one day - is worth itself.
Many commodities players say Africa will become the fastest growing continent in the next decade, catching up with Asia, which has fuelled commodities growth in the past decade.
The regional split, however, highlights risks and vulnerabilities of Trafigura's business.
Like many other commodities traders, Trafigura is a large player in oil exports and fuel deliveries to Nigeria, a risky business which can generate heavy debts. The firm is owed dozens of millions of dollars by Nigerian authorities alongside Vitol, Glencore and Mercuria.
It used to apply the same model in Angola although shipping data showed that Trafigura stopped receiving crude allocations from state oil firm Sonangol in 2012. It remains active in distributing fuel through a Puma joint venture with Angola's Sonangol.
Swiss-based Trafigura declined to comment on the changes to its business in Angola.
It was also one of the leading exporters of oil from Sudan. A cargo that it was marketing last year was seized as part of an international dispute between Sudan and the newly independent South Sudan.
Trafigura's best known African episode was a $200 million settlement with Ivory Coast in a dispute with the country over toxic waste dumping.
Trafigura's net profit was $992 million to September 2012 down from $1.11 billion in 2011 but excluding the sale of assets it was actually smaller.
Sales of assets have generated $340 million, including the disposal of copper producer Anvil Mining in the Democratic Republic of Congo to China's Minmetals in February 2012 for $305 million.
Without those one-offs, Trafigura's profits were around $650 million.
The firm's gross debt grew to $18 billion from $16.7 billion a year earlier but most of the debt was likely short-term and relating to commodities inventories.
The debt level does not seem to be worrying the lenders as Trafigura said it was dealing with 110 banks around the world and its credit lines have risen to $38 billion from $17 billion in 2008. (Additional reporting by Emma Farge in Geneva, editing by William Hardy)
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