Less than six months after entering the business, Vistin Pharma is closing its energy trading operation after racking up almost $12m in losses.
The Norwegian drugmaker, which specialises in producing diabetes medication, started its oil trading operations in September 2018.
The unit aimed to take advantage of price differentials between high- and low-sulphur marine fuel ahead of the 2020 global limit.
Torbjorn Kjus, Vistin’s head of energy trading and former DNB oil analyst, left the company on 2 January.
Vistin has entered into oil derivative contracts linked to the USD price differential between ICE low-sulphur gasoil and Sing380.
The total contract volume is 150,000 metric tons and the contracts expire on 31 December 2020.
Vistin said the market-to-market value of these contracts was negative $11.9m (NOK 101.3m) as of 3 January.
The Oslo-listed company will continue to manage its outstanding contracts, but won’t enter into any new positions.
“To establish a sustainable business unit based on energy trading has proved to be demanding,” Vistin said in a filing on Tuesday.
“The international energy markets have been challenging and the trading positions taken by the company have so far not performed as planned.”
