(Adds more figures, details)
By Dmitry Zhdannikov
LONDON May 9 Trading house Mercuria reported
lower core earnings and net profit for 2013, citing a tougher
trading environment and higher one-off investments to help
accommodate the trading business of Wall Street bank JP Morgan
Core earnings declined 7 percent to $562 million and net
profit fell 11.7 percent to $273 million on revenues of $112
billion, up 14 percent on 2012.
Most trading houses have been reporting weaker financial
results and weaker margins in the past couple of years. The
world's largest trader Vitol's annual profits slid
to the lowest level in nearly a decade.
"Trading conditions were tougher, let's face it," Mercuria
Chief Financial Officer Guillaume Vermersch said. "There was
very little volatility in our markets."
The company has seen one-off investments of $370 million as
it accelerated investments in IT, risk management and compliance
and hired 100 new staff, he said.
"We made a strategic choice to spend capital to reinforce
our operations and prepare for the JP Morgan's business arrival
which we expect to happen in Q3," he added.
JP Morgan is selling its physical commodities business to
the Swiss firm for around $3.5 billion, in a move that will help
sweep Mercuria into the top league of commodities traders as
Wall Street banks are exiting trading amid regulatory pressure.
Mercuria traded 195 million metric tonnes of oil or oil
equivalent in 2013, its gross profit increased by 10 percent and
shareholder equity also rose by a tenth to $2.7 billion.
The company is looking to sell a stake of up to 20 percent
to a strategic investor, probably from Asia, the company has
(Reporting by Dmitry Zhdannikov; Editing by Jason Neely and