Energy trader Gunvor reports highest profit since 2015

By Julia Payne

LONDON (Reuters) -Global energy trader Gunvor Group reported a net profit of $726 million for 2021, the highest since 2015, buoyed by its natural gas and liquefied natural gas (LNG) divisions, the company said on Tuesday.

The profit was the highest since 2015 when net profit was boosted by the sale of most of its Russian assets and was up on the $320 million the Geneva-based company made in 2020 when refining impairments took the shine off its record gross profit.

Gunvor’s rivals have seen record profits on higher oil volatility and skyrocketing natural gas prices in the second half of 2021. Vitol and Mercuria had historically high net profits last year while Trafigura also had a record for its financial year ending Sept. 30, 2021.

Gunvor reported total revenue of $135 billion, up sharply from $50 billion in 2020, as energy and commodity prices rebounded following the COVID-19 pandemic and amid higher traded volumes. Gross profit was $1.54 billion in 2021, compared with a record gross profit of $1.66 billion in 2020.

It traded 240 million tonnes of crude oil, refined products, natural gas and other commodities last year, compared with 191 million tonnes in 2020.

A spokesman for Gunvor said there were no exceptional items, such as cash put aside for any potential fines. The company faces bribery investigations into its Ecuador dealings in the United States and Switzerland after a former Gunvor employee pleaded guilty to bribing Ecuadorian officials in relation to oil deals last year.

Trading firms and oil majors alike have been grappling with unusually large margin calls in the billions of dollars on their gas hedges, a trend that began last year due to tight supplies, prompting many to ask for increased credit lines from banks.

Margin calls arise when the gap between the current spot price and the future sale becomes too wide, forcing traders to increase the deposit they hold at exchanges on each trade.

The extreme swings seen in gas last year have spread to most key commodities since Russia’s invasion of Ukraine, which has tightened liquidity and forced Gunvor and others to cut volumes this year.

(Reporting by Julia Payne;Editing by Mark Potter and Emelia Sithole-Matarise)