Gunvor studies highest full-year revenue since 2015

Gunvor has reported a greater than doubling of its full-year earnings, turning into the most recent commodity dealer to disclose bumper earnings for 2021 when it cashed in on rising demand for power as lockdown restrictions eased.

The Geneva-based firm managed by billionaire Torbjorn Tornqvist stated on Tuesday its web revenue hit $726mn within the 12 months to December, with buying and selling volumes leaping 25 per cent to 240mn tonnes.

The determine is the best revenue recorded by the corporate aside from for 2015, when it banked a big achieve from the sale of a majority stake in a Russian oil terminal. Gross revenue was $1.54bn.

“Underlying profit drivers included natural gas and LNG, which generated sustainable earnings throughout the year,” the corporate stated in a press release. “Gunvor continued to strengthen its balance sheet and maintains a healthy liquidity position.”

Revenue hit $135bn, up sharply from $50bn, as oil and fuel costs rebounded following the pandemic and Gunvor shipped extra commodities world wide. Brent crude rose by greater than 50 per cent in 2021, whereas fuel costs rallied sharply within the second half of the 12 months amid an power disaster in Europe.

Gunvor joins rivals Vitol, Mercuria, Trafigura and Glencore in reporting enormous earnings for 2021 on the again of booming demand for uncooked supplies and provide chain disruptions created by the coronavirus pandemic.

Analysts reckon 2022 may very well be one other robust 12 months for the trade however just for merchants which have entry to massive credit score traces and might handle the volatility attributable to the struggle in Ukraine and sanctions on Russia.

Hard-hitting measures imposed on Moscow have created profitable arbitrage alternatives and a reordering of worldwide commerce flows however financing buying and selling positions has change into extra capital-intensive.

Gunvor reduce buying and selling positions within the autumn after a fuel worth spike triggered margin calls — calls for for additional money to cowl its hedging positions — from brokers and exchanges.

However, over the previous 5 months it has secured greater than $3bn of credit score amenities and loans and has continued to commerce usually regardless of “erratic” worth actions.

Gunvor has pulled again from Russia since 2014, when the US imposed sanctions on Gennady Timchenko, its Russian co-founder, for his alleged ties to President Vladimir Putin.

Timchenko offered his stake to Tornqvist simply earlier than the sanctions had been introduced and has departed from the corporate.

In the previous 5 years, Russian-origin commodities have accounted for simply 6-11 per cent of Gunvor’s buying and selling actions.

Like a lot of its rivals, the corporate stated it was legally obliged to fulfil present buying and selling contracts, which aren’t below sanctions, with Russian oil and fuel producers. However, it has determined to not open any new enterprise.

Speaking on the FT Commodities Global Summit final month, Tornqvist stated he was open to the concept of promoting a stake within the firm, which was based in 2000, to increase its actions.

“For us to go and really, shall I say, exploit the potential of the company, it would be desirable to explore additional equity,” he stated. “We are open to find an alliance which could increase the size of the company.”

Tornqvist owns practically 89 per cent of Gunvor and in 2019 held talks about promoting a stake to Algeria’s state oil and fuel producer Sonatrach.

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