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LONDON (Reuters) – Global trading house Trafigura posted a sharp drop in its earnings for 2024 and revised its equity and profit for previous years after uncovering a $1 billion fraud in Mongolia, the company said on Friday.
Earnings fell 60% from 2024 to $2.8 billion, the lowest since 2020. Trafigura’s financial year ends on September 30.
A lower score marks the end of a period of exceptional earnings. Over the past four years, commodity traders have cashed in on unprecedented market volatility caused by the COVID-19 pandemic, the energy crisis in Europe and Russia’s full-scale invasion of Ukraine.
As its earnings fall, the Geneva-based firm faces possible fines as a result of a Swiss corruption trial, as well as an equity buyback from departing senior managers and an imminent CEO ouster.
The company paid $2 billion in dividends in 2024, compared to nearly $6 billion in 2023.
The Geneva-based company said it recorded a $358 million impairment charge on its Mongolia business in 2024 “with the balance recorded as prior period adjustments.”
Trafigura attributed most of the total to debts owed by its counterparty in the country, Lek Oil, but its own internal investigation is underway to try to find about $500 million. The fraud in Mongolia is the second such loss in two years after the company wrote off $600 million related to a nickel contract it said was fraudulent.
Trafigurin producer of zinc and lead Nirstar ( EBR: ) also took a significant write-down of nearly $300 million in 2024.
The $1.1 billion loss in Mongolia occurred over five years. Trafigura has revised its earnings and group equity for 2022 and 2023 to reflect the loss of Mongolia. 2022 was revised to $6.8 billion from $7 billion, and 2023 was revised to $7.3 billion from $7.4 billion, the results showed.
The group’s capital fell slightly to $16.3 billion after it was revised to $15.8 billion in 2023 from $16.5 billion.
EBITDA fell 36% to $8.1 billion. The volume of oil and fuel traded by Trafigura increased by 6.8 million barrels per day (bpd), compared to 6.3 million barrels per day in 2023.
Trafigura has not set aside any provision to cover possible fines related to the ongoing corruption trial in Switzerland, where prosecutors are seeking a total of $156 million from the trading house over its activities in Angola.
Trafigura’s 2024 financial year will be the last with CEO Jeremy Weir at the helm. He is stepping down in January to be replaced by head of gas, electricity and renewables Richard Holtum. Weir, who has been CEO for more than 10 years, will become chairman of the board.
