Trader Gunvor Group logged its best-ever trading profit in 2020 as the Covid-19 pandemic opened up lucrative opportunities.
The giant charterer and shipowner said it traded 191m tonnes of commodities last year — the equivalent of 2.7m barrels per day (bpd) of oil and equivalents.
Revenue was $50bn, while net profit hit $320m.
Gunvor noted strong performances across all desks, including crude, products, LNG and natural gas.
"Thanks to robust earnings, the company continued to strengthen its balance sheet and enhance its liquidity position," the group said.
Gunvor said it responded effectively to "an extraordinary and unprecedented set of circumstances" in the second quarter of 2020.
Contango bonanza
Gunvor said the combination of sharp Covid-19-related demand destruction and an increase in supply by oil producers resulted in a "massive contango structure".
"This situation created profitable trading opportunities," the group added.
Healthy trading margins continued in the second half as oil production was cut back by almost 10m bpd, along with demand recovery led by China.
The company’s core profit drivers, such as natural gas and LNG, also continued to generate sustainable earnings throughout the year.
But refining margins overall remained negative.
Taking a refinery hit
The net result includes impairments of $340m in relation to refining assets.
Gunvor mothballed the Antwerp refinery in Belgium and shut down its two crude distillation units at the Rotterdam refinery in the Netherlands.
This cut crude oil refining capacity from 300,000 bpd to 100,000 bpd.
The group has pledged to phase out its own non-eco ships this year — and severely limit the number of older vessels it charters in.
The company revealed in its first sustainability report that 100% of owned ships will be eco tonnage by 2022 — and only 25% of the time-chartered fleet will be non-eco ships over the same time frame.
Before 2027, Gunvor has promised to have a 100%-eco chartered fleet.
Fleet being transformed
The group, through its subsidiary Clearlake Shipping, has already begun to transform its vessel profile.
Gunvor's owned fleet used to consist of 73% non-eco ships.
The group, which is owned and led by chief executive Torbjorn Tornqvist, owns or operates more than 100 vessels, including tankers.
The fleet also includes a "sizeable" number of managed LNG ships, and Tornqvist said the sheer volume of its gas trading creates "substantial optionality" in the spot market.
About 50% of Gunvor’s trading today consists of "transitional" commodities such as biofuels and LNG.
The group has ceased physical coal trading and acquired biofuels plants.
