March 26, 2019 / 12:44 PM / 3 months ago

Commodity trader Mercuria's net profits edge lower in 2018

LAUSANNE, Switzerland, March 26 (Reuters) - Commodity trader Mercuria Energy Group's net profit fell 5 percent last year in line with the industry's weak performance on the oil side, its CFO said, but profits were still among the highest since the company was set up in 2004.

The Geneva-based firm reported a net profit of $419 million, the third highest since the company was launched, but this was down from $442 million in 2017, Mercuria CFO Guillaume Vermersch said. Gross profit on sales was $1 billion.

Total revenues were up 17 percent at $121 billion while oil revenues were up 15 percent due mostly to distillates.

Vermersch said the performance was solid because of the company's increasingly diversified portfolio.

"All segments contributed, gas and power, oil even if it was a difficult year to trade but it performed pretty well," he said. "But it's still an environment of a gross margin of 0.5-1.5 percent, a relatively thin margin to absorb," Vermersch added.

About 46 percent of Mercuria's traded volumes were non-oil, including gas, power, dry bulk and coal, while oil accounted for 54 percent. In 2017, non-oil accounted for only 35 percent.

Traded volumes were 355 million tonnes last year up from 331 million tonnes in 2017.

The jump was in part due to the closing of Mercuria's acquisition of Noble Group's American gas and power business.

Vermersch said that the race for additional volumes to counteract the market's thin margins was not their aim. Instead the firm continues to build up its structured finance franchise, he said.

He added that Mercuria was actively looking to get involved in the liquefied natural gas market this year. (Reporting By Julia Payne. Editing by Jane Merriman)

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