8 de diciembre de 2014 / 12:12 / en 3 años

UPDATE 2-Cheap commodities to spur global growth, China a bright spot - Trafigura

* Dauphin sees predictions of Chinese slowdown exaggerated

* Core earnings, gross margin rise in 2014

* Fixed assets flat despite big divestment (Updates with Dauphin comments, details from report)

By Dmitry Zhdannikov

LONDON, Dec 8 (Reuters) - Lower commodities prices will spur the global economy and China remains a boon for raw materials despite the country’s recent weak data, Swiss trading house Trafigura’s founder Claude Dauphin said on Monday as his firm reported a rise in core earnings.

“It is also worth remembering that current lower commodity prices will themselves act as a boon to the world economy, along with lower freight and financing costs,” Dauphin, Trafigura’s executive chairman, said in a statement.

He said Trafigura, one of the world’s largest commodities traders, was insulated from sharp price fluctuations because it hedges price risk. “But we are not indifferent to the benefits of falling prices for growth,” Dauphin added.

Oil prices have fallen by 40 percent since this year’s peak in June on oversupply fears, while the broader 19-commodity Thomson Reuters/Core Commodity CRB Index has fallen by a fifth.

Unlisted Trafigura said in its annual report capital investment during the year to September 2014 was $1.7 billion, slightly lower than the $2 billion invested in 2013.

Dauphin said large scale investments emphasised the firm’s confidence in the outlook for commodity prices “as a counterweight to the gloom that has become fashionable to express”.

“Whatever the short-term numbers say, China remains a fundamental growth factor in markets as disparate as copper, coal and liquefied natural gas,” Dauphin said.

“In any case, 7 percent annual growth on today’s base equates to dramatically larger volumes of material than did 10-plus percent growth from the base of five years ago. At this pace, the Chinese economy will have doubled again in a decade,” Dauphin added.

Hurt by a sagging property market, unsteady exports and cooling domestic demand and investment, China’s growth is expected to slow to a 24-year low of 7.4 percent this year, a Reuters poll has showed.


Dauphin’s views of commodities markets, usually expressed only once a year in the firm’s annual report, are closely watched by the industry, which sees him as one of the most experienced executives still actively involved in trading.

Dauphin stepped down in March as Trafigura’s chief executive to receive medical treatment. Industry sources have said he still remains deeply involved in the firm’s activities. .

On Monday, Trafigura reported a 13 percent rise in core earnings (EBITDA) to $1.309 billion in the fiscal year to September 2014 and a rise in gross profit on a like-for-like basis of 14 percent to $2.045 billion.

Revenue was $127.6 billion in 2014, a dip of 0.4 percent on a like-for-like basis.

The deconsolidation of its Puma Energy subsidiary was largely responsible for a 50 percent fall in net profit in 2014 to $1.08 billion.

In 2013, Trafigura sold shares in Puma Energy and in 2014 it sold its 80 percent interest in an oil storage terminal in Corpus Christi, South Texas, and its bitumen business to Puma Energy.

Despite large divestment, the firm’s fixed and non-current assets were little changed from a year earlier at $7.88 billion, which the firm said showed its commitment to large investments including in iron ore terminals in Brazil, terminals in Columbia and a mine in Spain.

Trafigura said its gross profit margin rose to 1.6 percent versus 1.4 percent in 2013, adding that it had particularly strong increases in oil and refined products, which more than offset declines in metals and minerals.

Total volume of oil and products traded increased by 2 percent to 120.4 million tonnes, with Trafigura now trading more than 2.5 million barrels per day. It said it was expecting the importance of its U.S. operations to rise further.

“Next year, we expect to double our volumes in both Eagle Ford and the Permian basin and will continue to develop infrastructure both globally and in the U.S. onshore domestic market,” the head of oil, Jose Larocca, said in the report.

Metals and minerals volumes overall were up by 49 percent at 49.1 million tonnes, mainly on the back of strong growth in coal, where Trafigura said it was now a top three player in global trade. (Reporting by Dmitry Zhdannikov; Editing by Christopher Johnson and Susan Thomas)

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