* Sees 2013 EBITDA up 25 percent on flat revenues, volumes
* Tornqvist says all major counterparties trading with
* Tornqvist says Timchenko has no option to buy back stock
(Adds quotes, details)
By Dmitry Zhdannikov
LONDON, April 16 Trading house Gunvor reported
core earnings rose by a quarter in 2013 and said it expected to
improve results again in 2014 despite the brief turmoil it faced
last month due to its close links to Russia.
Energy focused Gunvor's operations were disrupted for some
hours when the United States imposed sanctions on its co-founder
Gennady Timchenko, a businessman close to President Vladimir
Putin, as part of broader measures to put pressure on Moscow for
its annexation of Ukraine's Crimea region.
Gunvor said Timchenko had sold his stake to the other
co-founder, Chief Executive Torbjorn Tornqvist, a day before
sanctions were imposed, to ensure continuity of operations.
"Financially we are stronger than ever. We haven't lost a
single client. We have 70 banks working with us and some banks
have increased exposure to us in the past weeks. If you asked me
what we put on hold, I will say that nothing has been put on
hold," Tornqvist told Reuters.
The day after sanctions were imposed, Western banks and
traders rushed to reassess their relationship with Gunvor and
decide whether they could trade with one of the world's largest
Risk departments at most trading houses and banks cleared
Gunvor within 24 hours after U.S. officials clarified no
sanctions would apply to the company. Some companies took longer
to reach the decision.
Tornqvist said all major clients, including major U.S.
companies, were now trading with Gunvor.
He also said the transaction with Timchenko, who was a major
driving force behind Gunvor's expansion in Russia, was
irrevocable and there was no option for him to buy back into the
Gunvor reported its core earnings rising by 25 percent to
$719 million in 2013, representing an average 28 percent
increase in EBITDA year-on-year for the last three years.
Many of Gunvor's rivals have seen a drop in margins despite
a rise in revenues and traded volumes over the past couple of
Net profit edged higher to $308 million from $301 million on
revenues of $91 billion versus $93 billion in 2012.
Overall trading volumes were flat at 131 million tonnes
which Tornqvist said was due to bigger coal operations. He also
said the firm traded bigger volumes of crude from the Middle
East, Africa, South America and the Far East to replace smaller
volumes of crude from Russia.
"We are pleased with coal. It was negative in 2012 and we
turned it around. Crude also performed a great deal better,"
He said that since the March turmoil Gunvor has been
approached to return to the bond market and added that the
trading house would decide on the format and volume of its
revolving credit facility in Asian markets in the next two
Tornqvist also said that, over time, he would like to reduce
his stake in Gunvor as he currently controls 100 percent of
voting shares but he does not yet know whether he will sell the
stock externally or to employees.
"We will address this in the long-term," he said.
(Reporting by Dmitry Zhdannikov; Editing by Anthony Barker)