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UPDATE 1-Trafigura H1 profit jumps 24 pct, sees brisk commodity demand
June 16, 2014 / 2:40 AM / 3 years ago

UPDATE 1-Trafigura H1 profit jumps 24 pct, sees brisk commodity demand

(Adds comments, further details from interim report)

SINGAPORE, June 16 (Reuters) - Commodity trading giant Trafigura said its first-half net profit jumped 24 percent, driven by a rise in volumes in its oil and bulk businesses, and forecast solid margins and volume growth for the second half.

Trafigura, the third-largest oil trader after Swiss rivals Vitol and Glencore, posted a profit of $469.7 million in the six months to March this year, the company said in its interim profit report.

Trading volumes in its oil and petroleum business were up 7 percent from a year earlier, while volumes in its non-ferrous and bulk commodities business surged 67 percent.

“We expect solid margins and volume growth to be sustained into the second half of this year,” Chief Executive Jeremy Weir, who assumed his position in March, said in the statement.

The Dutch trading firm said it expects demand for energy products and industrial raw materials that it handles to continue growing in the foreseeable future.

“China’s GDP growth may have moderated to an expected 7.5 percent this year from the double-digit rates of recent years, but this still translates into a need for ever-higher volumes of raw materials and energy,” Executive Chairman Claude Dauphin said in the statement.

Dauphin added that while growth in some emerging markets may have slowed significantly, others were picking up momentum such as Africa.

“It is hard to see these fundamental global trends going into reverse,” said Dauphin.

The company said overall gross margin for the six-month period was 1.5 percent, unchanged from a year ago on a like-for-like basis, while net turnover rose to $63.8 billion from $61.8 billion in the same period last year.

The filing to the Singapore exchange follows Trafigura’s listing of a $500 million perpetual subordinated bond on the bourse in 2013.

Trafigura, which has long relied on its oil and non-ferrous business, has recently invested in coal and iron ore as new growth areas and has been buying key infrastructure assets to support its trading business.

The company has said its subsidiary Impala’s Porto Sudeste iron ore export facility in Brazil, which it jointly controls with Abu Dhabi sovereign wealth fund Mubadala Development Co , is expected to start operations in the third quarter of this year. (Reporting by Rachel Armstrong and Manolo Serapio Jr.; Editing by Richard Pullin)

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