* Sees 2013 EBITDA up 25 percent on flat revenues, volumes
* Tornqvist says all major counterparties trading with Gunvor
* Tornqvist says Timchenko has no option to buy back stock (Adds quotes, details)
By Dmitry Zhdannikov
LONDON, April 16 (Reuters) - 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 trading houses.
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 company.
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 years.
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,” said Tornqvist.
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 weeks.
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)