Trafigura traders share $3 billion payout on record profit

Trafigura group has paid out $3 billion in bonuses to its top executives and traders as it achieved a record-breaking profit for the six months ending March.

Trafigura has paid out the highest amount ever. This is just the latest example of how a group of commodity traders, fueled by the energy crisis caused by Russia’s invasion in Ukraine, have shared a bounty unprecedented.

Trafigura has announced a net profit of $5.5billion for the six-month period ending March. This is a 108% increase from the same time last year and its third consecutive half year with record earnings. The company’s results were released as it was being hit by an alleged Nickel fraud.

Dividends are shared by employees who own Trafigura. The latest count is about 1,200 according to a spokesperson for the company, which means they would each receive about $2.5 million on average.

Trafigura’s success is not unique. The rival Vitol Group also made a record profit of nearly $15 billion in the past year. Meanwhile, energy trading divisions at oil giants BP Plc. and Shell Plc. have seen impressive gains.

Trafigura has warned that despite the record earnings, they are unlikely to continue in the rest of the year due to the easing of the energy crisis which gripped Europe a year ago.

“We don’t expect the extraordinary market conditions of 2022 and 2023 will continue into the rest of this year,” stated Chief Executive Officer Jeremy Weir. The impact of tighter monetary policies on the global economy and a less stressful environment for commodity supply chain, as well as seasonal factors which affect the demand for commodities like gas, all help to moderate volatile conditions.

Trafigura reported record profits, but only with a slight increase in its tax bill. The company reported income taxes of $627 millions for the period. This represents an effective tax of just over 10%. Trafigura owns a wide range of assets, from zinc smelters and fuel stations in Africa to zinc smelters and fuel stations in Belgium and The Netherlands. However, the bulk of its profits are made by traders in low-tax hubs like Switzerland and Singapore.

Trafigura incurred a $590-million charge for the alleged nickel scam — a slight increase from the $577-million loss announced in February. This means that the majority of Trafigura’s profits were generated by the energy division. Trafigura reported that the metals and minerals segment accounted for only 10% of its overall operating profit, before depreciation or amortization. The company called this a “robust overall performance in challenging market conditions”.

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