Oil Trading Giant Trafigura Triples Dividends After Record-High Profit

Commodity trader Trafigura paid its highest-ever dividends for its 2022/2023 financial year, after posting another record-high profit amid volatile markets. 

Trafigura, one of the biggest independent oil and commodity traders in the world, said in its 2022/2023 fiscal year results on Friday that its net profit jumped to about $7.4 billion for the year to September 30, 2023, up from $7 billion for the previous fiscal year, which was the then-record-high profit for the privately owned trading group.

Trafigura paid $5.9 billion in dividends to around 1,200 of its top executives and traders, who have received huge paychecks over the past two years as commodity trading houses reaped the benefits of high volatility in the energy and metals commodity markets.

Trafigura said today that its new all-time high profit was the result of strong performance across all three core divisions – Oil and Petroleum Products; Metals, Minerals, and Bulk Commodities; and Gas, Power, and Renewables.

“Exceptional earnings were achieved during the first half of the year as our teams provided valuable services to our customers in disrupted energy markets and captured opportunities in a volatile environment,” Trafigura said in a statement.

Trafigura’s effective tax rate varies from year to year according to circumstances and, in FY2023 it dropped to 8%, meaning an income tax charge of $640 million, down from 12% for the previous year, when Trafigura’s income tax charge was $933 million.

“The reduction in FY2023 reflects a one-off benefit from the recognition of historic tax losses and higher earnings in lower tax jurisdictions,” the company said, adding that it expects a higher effective tax rate in the 2024 financial year.

Looking forward, Trafigura expects in the near term “a return to more normal market conditions as the supply chain disruptions that have characterised commodity markets” have started to ease. 

“Looking forward, we expect to see reduced volatility in the year ahead, however, we face uncertain times and there is no room for complacency,” CEO Jeremy Weir said.  

“Low inventories, geopolitical threats, elections in nearly two-thirds of the democratic world in 2024 and brittle supply chains mean markets are fragile and vulnerable to spikes driven by sudden changes in supply and demand.”

By Tsvetana Paraskova for Oilprice.com

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