EXCLUSIVE Energy Trader Mercuria Post Volatile Record 2020 Profit

A flag with the logo of the commodity trading house Mercuria is pictured in Geneva, Switzerland on October 11, 2016. REUTERS / Denis Balibouse / File Photo

LONDON, June 30 (Reuters) – Mercuria Energy Group had a booming year in 2020, driven by the extreme volatility observed in the oil markets caused by the COVID-19 pandemic, as well as by very good returns overall of its portfolio, in particular in gas and electricity.

The Geneva-based company had its best year ever in 2020, earning $ 786 million, up from $ 576 million in 2019, according to a source with direct knowledge and Reuters records. The company does not generally disclose its financial results but has confirmed the 2020 figures.

Revenue fell in line with commodity prices to about $ 85 billion, from $ 116 billion the year before. Gross margin on sales was $ 1.86 billion, up from $ 1.35 billion in 2019.

“This is what I will take away from 2020, a year of extreme volatility and a very good live test of our risk management fundamentals … we have tested all of our extreme scenarios and have succeeded”, Guillaume Vermersch, responsible director of finance, said.

“The results were very positive, I think we are quite proud of our acceleration in terms of investments in activities related to ESG (environment, social and governance). be the 10-year target. “

The company, founded in 2004, is among the world’s five largest oil traders, moving just under 2 million barrels per day of oil and refined products.

However, Mercuria’s traded volumes have gradually shifted to be predominantly non-oil, including natural gas, emissions, metals, coal and electricity. In 2019, Mercuria’s total trade volume was 368 million tonnes.

Vermersch said oil only made up 38% of the company’s revenue and margins remained slim at less than 1.5%. He added that the company has now moved to mirror power more and that its traded volumes were 33,412 terawatt hours in 2020.

The company will continue to focus on the energy transition and has a pipeline of green projects amounting to more than $ 1 billion.

Mercuria has spent $ 400 million in the past eight months on green assets related to renewables, power grids and electric vehicles.

Demand for commodities, especially oil, collapsed in April last year when 4 billion people were in some form of containment. Prices rebounded at the end of the year, especially after the start of a vaccination campaign.

Trading companies had a good year as they were able to profit from the volatility of paper as well as the physical market where they stored cheap and junk oil which was then resold at much higher prices.

Mercuria’s biggest rivals, Trafigura, had a record year while Glencore’s marketing arm (GLEN.L) posted its best performance since 2008. Profits from trading were also a key boost over the course of the year. a dark year for majors like Royal Dutch Shell (RDSa.L) and BP (BP.L).

Reporting by Julia Payne Editing by Marguerita Choy

Our Standards: Thomson Reuters Trust Principles.

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