Energy trader Gunvor more than doubles provision for US fine

By Julia Payne

BRUSSELS (Reuters) - Global energy trader Gunvor's first-half net profit slipped to $803 million from $841 million a year earlier, it said on Friday, citing lower price volatility in gas and oil markets, while it more than doubled a provision set aside for a potential U.S. fine.

The United States Department of Justice and U.S. CFTC have been investigating Gunvor's business dealings in Ecuador and subpoenaed the company in 2020.

A former Gunvor employee pleaded guilty in 2021 to what U.S. federal prosecutors called a scheme to bribe Ecuadorean government officials to win business. Gunvor increased the amount set aside to cover an expected fine to $450 million at the end of June, up from $200 million set aside in 2022.

The Geneva-based trader's revenue fell to $61 billion from $106 billion owing to lower gas and oil prices as the market began to normalise after the turbulence caused by Russia's invasion of Ukraine last February.

Gunvor, one of the top five oil traders, achieved record full-year net profit of $2.36 billion in 2022 while rivals such as Mercuria and Vitol also posted bumper profits after the extreme market dislocations due to Western sanctions on Moscow.

Earnings before interest, tax, depreciation and amortisation edged up to $1.83 billion in the first half of 2023, from $1.79 billion in the same period last year.

"While crude oil and oil products trading margins were impacted by lower price volatility, LNG trading continued its strong performance thanks to its profitable book of long-term contracts," the company said, adding that its traded LNG volumes fell.

(Reporting by Julia Payne; editing by David Goodman, Kirsten Donovan)