Trafigura web revenue, fairness drops after Mongolia fraud

By Julia Payne and Robert Harvey

LONDON (Reuters) – International commodity buying and selling home Trafigura noticed a pointy drop in its earnings for 2024 and has revised down its fairness and income for earlier years after it found a billion-dollar oil fraud in Mongolia, the corporate mentioned on Friday.

Earnings dropped by 60% on the 12 months in 2024 to $2.8 billion, the bottom since 2020. Trafigura’s monetary 12 months ends on Sept. 30.

The decrease outcome marks the tip of a interval of remarkable earnings. Over the past 4 years, commodity merchants cashed in on unprecedented market volatility generated by the COVID-19 pandemic, Europe’s vitality disaster and Russia’s fullscale invasion of Ukraine.

As its earnings fall, the Geneva-based agency faces potential fines because of a corruption trial in Switzerland, in addition to fairness buybacks from departing senior managers, and an imminent CEO changeover.

The corporate paid $2 billion in dividends in 2024 in comparison with practically $6 billion in 2023.

The Geneva-based agency mentioned it recorded a $358 million impairment for its Mongolian enterprise in 2024 “with the steadiness recorded as prior interval changes”.

Trafigura attributed nearly all of the entire to money owed owed by its counterparty within the nation, Lex Oil, however its personal inside investigation is ongoing to attempt to find round $500 million. The Mongolia fraud is the second such loss in two years after the agency wrote off $600 million in reference to a nickel deal it mentioned was fraudulent.

Trafigura’s zinc and lead producer Nyrstar (EBR:NYR) additionally led to a major impairment of practically $300 million in 2024.

The $1.1 billion loss in Mongolia was accrued over 5 years. Trafigura revised its 2022 and 2023 earnings and group fairness to replicate the Mongolia loss. 2022 was revised to $6.8 billion in contrast with $7 billion and 2023 was revised right down to $7.3 billion from $7.4 billion, the outcomes confirmed.

Group fairness fell barely to $16.3 billion after 2023 was revised right down to $15.8 billion from $16.5 billion.

EBITDA fell 36% to $8.1 billion. Trafigura’s traded oil and gasoline volumes had been up at 6.8 million barrels per day (bpd), in contrast with 6.3 million bpd in 2023.

Trafigura has not put aside any provision to cowl potential penalties linked to an ongoing corruption trial in Switzerland, the place prosecutors are in search of a complete of $156 million from the buying and selling home over its Angolan actions.

Trafigura’s 2024 monetary 12 months would be the final with CEO Jeremy Weir on the helm. He steps down in January to get replaced by gasoline, energy and renewables boss Richard Holtum. Weir, who was CEO for over 10 years, will develop into chairman of the board.