Gunvor has publicly released detailed financial results for the first time, showing the commodity trader handled a record amount of raw materials in the first half of the year amid strong demand for natural gas and crude oil.
The privately owned group controlled by billionaire Torbjorn Tornqvist said in results that its trading volumes had risen 28 per cent year on year to 118m tonnes in the six months to June.
The figures suggest big commodity traders — a group that also includes Vitol, Trafigura, Glencore and Mercuria — are well-positioned to take advantage of the supply crunch that has gripped energy markets and sent gas prices to record highs.
Gunvor cited increased demand for fuel as economies reopened after pandemic restrictions and “unusually cold winter conditions” in Asia and parts of the US for the pick-up in volumes.
“Liquefied natural gas (LNG) performed strongly, benefiting from volatility and market dislocations and the natural gas business’s positive performance continued during the period,” Gunvor said in its interim results statement. “Crude and core oil products reported healthy results as well.”
Since the end of Gunvor’s half-year, natural gas prices in Europe have surged 120 per cent while LNG futures contracts in Asia have risen by the same amount. Crude oil, which could benefit from industries switching away from gas, traded above $80 a barrel this week for the first time in three years.
Geneva-based Gunvor, which says it is the world’s biggest independent trader of LNG, has not previously released detailed financial information.
It made its half-year numbers available late on Tuesday on Euronext Dublin following a bond issue this month. The company is seeking to diversify its sources of funding and extend the maturity of borrowings.
Commodity traders typically rely on large credit lines from banks to finance their trading activities. A number of lenders, however, have pulled back from the sector following a string of scandals in Singapore that left them nursing big losses.
In the six months to June, Gunvor reported net income of $213.1m, down from $230.5m a year earlier when the company reported record results as it profited from storing cheap crude oil and selling it to the futures market for higher prices.
It said natural gas and crude oil experienced the most significant growth in the first half of 2021, with trading volumes rising 27 per cent and 77 per cent respectively. Revenues, which reflect higher commodity prices as well as volumes, almost doubled to $47bn.
Gunvor’s equity increased 13 per cent to $2.5bn at the end of June. Tornqvist, who is chair and chief executive, owns 87 per cent of the company.
In the results statement, Gunvor also said it was under investigation by the US Commodity Futures Trading Commission in relation to its activities in Ecuador.
A former Gunvor employee turned agent pleaded guilty in a New York court this year to helping funnel more than $22m to Ecuadorean officials in exchange for lucrative contracts with state oil company Petroecuador.
“In connection with the existing Department of Justice investigation in relation to Ecuador, the US Commodity Futures Trading Commission is also conducting an investigation,” the company said in the results.
“Gunvor is not aware of the full scope of the DoJ investigation. Accordingly, there can be no assurances about the direction of the investigation.”
Gunvor and some of its rivals have stopped using agents to win business in resource-rich countries where corruption is often rife.