Trafigura shareholders and traders to share £1.4bn pot

TRAFIGURA has handed $1.7bn (£1.4bn) to its top traders and executives after the commodities broker was boosted by volatile energy markets in the wake of Russia’s invasion of Ukraine.

The Swiss-based private trading company, owned by 1,100 shareholders predominantly made up of its traders and executives, will distribute the massive pot among investors after profits soared to $7bn for the year. Revenues climbed to $318.5bn during the period.

Christophe Salmon, Trafigura’s finance chief, said the outstanding performance was driven by its oil and petroleum products business, which had “an exceptionally strong year”.

The volatility and disruption in markets triggered by Russia’s war in Ukraine have helped create the most profitable period in history for companies that move energy, metals and crops around the world. Rivals, including Glencore and Vito, have also posted blockbuster results this year.

Jeremy Weir, Trafigura’s chief executive, said 2022 had seen “unprecedented market volatility” and “big structural shifts” because of the war in Ukraine and the energy crisis in Europe. He added: “We are interfacing a lot more with governments and regulators on particular issues, just providing market intelligence – what we’re seeing, what we’re thinking – so they can formulate good policy.”

While the volatility caused by the war in Ukraine has helped drive commodity trading profits, the surging prices have also placed a huge strain on the industry’s balance sheets.

The Bank for International Settlements recently highlighted Trafigura’s leverage levels and reliance on shortterm funding in a report drawing attention to liquidity strains in commodity markets.

The company’s average value-at-risk – a metric measuring how much it could lose on an average trading day – quadrupled to $200m in the financial year.

The total volume of commodities traded during the period declined after long-term contracts for Russian crude oil and products were terminated as a result of international sanctions.

Mr Weir said its traders performed “exceptionally well, adapting quickly to changing trade flows and identifying supply bottlenecks” in the last year.