This commodity trader made heaps of money from the oil price crash - now it's paying staff £500 million in bonuses
The profit increase which enabled the big pay out is due to Trafigura's performance in the oil market, where it has taken advantage of its oil storage capabilities to turn a big profit, using the pricing pattern known as contango.
Trafigura also arranged a series of deals with government owned Russian oil company Rosneft, making it one of the largest exporters of Russian oil. Rosneft has been hit by international sanctions, truncating its operations.
Speaking about the company's results, CEO Jeremy Weir said "The year provided ample opportunities for Trafigura to demonstrate the strength and robustness of a business model built to thrive in turbulent market conditions," adding that "Trafigura is well positioned to cope with distressed markets and to seize new opportunities, thanks to our focus on both oil and metals and minerals trading, our sound finances, strong liquidity and careful risk management."
"Performance was especially strong in crude oil,where we saw an increase in volumes sourced from Russia among other producing nations," Weir added.
Other headline numbers in Trafigura's annual report included:
- Overall revenues down 23% to £64 billion ($97.2 billion), reflecting the big drop in commodity prices, particularly that of oil.
- Trading of oil and petroleum products up by 22% to 146.3 million metric tonnes.
- This is more than 3 million barrels of oil per day, compared to around 2.5 million in 2014.
- 52.1 million metric tonnes of minerals and metals traded over the year.
- EBITDA up to £1.23 billion ($1.86 billion), a rise of 43%. Trafigura believes that this is the most accurate measure of its performance.
While trading houses like Trafigura have managed to turn the commodity price crash to their advantages, virtually all of the big commodity mining firms have been hit hard by the impacts of the crash. The world's largest platinum miner, Anglo American last week announced that it will cut nearly two thirds of its staff, and shares in miners are almost all down heavily over the course of 2015.