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Vitol generates record net profit of $4bn in 2021
Vitol, the world’s greatest impartial vitality dealer, made document income final 12 months on the again of rising demand for vitality as lockdown restrictions eased.
The privately owned group generated greater than $4bn of internet revenue as income virtually doubled to $279bn on the again of upper oil and gasoline costs, in accordance with individuals who have seen a replica of its outcomes. Gross revenue rose $1bn to $6bn, they stated.
The figures beat Vitol’s earlier document internet revenue of round $3bn in 2020 when the corporate took benefit of panic promoting within the oil market to snap up low-cost barrels of crude and promote them for a revenue within the futures market.
Vitol, which is owned by roughly 400 senior companions unfold throughout the energy-trading hubs of London, Geneva, Singapore and Houston, will not be the one dealer to have loved bumper income in 2021.
Geneva-based Mercuria reported document internet revenue on Friday of $1.25bn within the 12 months to December, whereas Trafigura generated internet revenue of $3.1bn in its 2021 fiscal 12 months and handed virtually $1bn to its senior workers.
Vitol declined to touch upon the figures.
Commodity merchants are the middlemen of the worldwide financial system, linking the suppliers of uncooked supplies — typically in growing nations — with shoppers in rich and fast-growing nations.
Vitol, which continues to be registered within the Netherlands however whose high executives primarily sit in London, is way from a family title within the UK however has grown quickly over the previous 20 years.
That has allowed the corporate to return big quantities of money to its senior executives and merchants, together with a $2.9bn payout in 2020.
Final week, the corporate stated it traded 7.6mn barrels per day of oil and petroleum merchandise in 2021, up from 7.1mn b/d as demand rebounded with all of its predominant markets seeing sturdy progress apart from jet gas. It didn’t disclose a internet revenue determine.
Brent crude rose by greater than 50 per cent in 2021, whereas gasoline costs rallied sharply within the second half of the 12 months amid an vitality disaster in Europe.
Bankers consider 2022 may very well be one other bumper 12 months for commodity merchants which have entry to massive credit score traces and might handle the intense value strikes attributable to the warfare in Ukraine and sanctions on Russia.
Brent crude hit a 14-year excessive of just about $140 a barrel earlier this month earlier than pulling again, whereas Europe wholesale gasoline costs briefly rose to a excessive of €335 per megawatt hour. The worth is now hovering round €105 MWh.
On this setting, merchants have wanted extra cash to finance their day-to-day enterprise as rising commodity costs have made it costlier to fill a tanker with crude oil.
On the similar time they’ve confronted big margin calls — or calls for for money — to cowl hedges taken out for the longer term sale of commodities. Consequently many merchants have been pressured to attract down credit score traces from bankers and put in place back-up amenities.
Confronted with a money crunch some small and midsized gamers have pulled again from the market, leaving firms corresponding to Vitol and Trafigura with few opponents within the crude oil tenders run by refiners.
“The worth volatility is worrying all people,” Russell Hardy, Vitol chief govt, advised delegates final week on the FT Commodities World Summit in Lausanne. “Folks can’t simply predict what’s going to occur sooner or later and participation out there is decreasing due to that degree of uncertainty.”
Vitol’s internet revenue determine for 2021 was first reported by Reuters.