Mercuria Revenue Growth Tops Rivals Before JPMorgan Deal
Mercuria Energy Group Ltd., which in March agreed to buy JPMorgan Chase & Co.’s physical commodity unit for $3.5 billion, reported the largest increase in annual revenue among big closely held commodity-trading houses.
Mercuria’s 2013 revenue rose 14 percent to $112 billion, according to an update on the Geneva-based company’s website.
That beats a 10 percent increase to $133 billion reported by Trafigura Beheer BV for its fiscal year ended Sept. 30. Annual revenue at Vitol Group, the world’s largest independent oil trader, rose 1.3 percent to $307 billion, the company said last month. Gunvor Group Ltd. said last week that 2013 sales fell to $91 billion from $93 billion a year earlier.
The results show Mercuria, which was founded in 2004 by former Goldman Sachs (GS) traders Marco Dunand and Daniel Jaeggi, is growing its trading business faster than competitors. In the past three years, revenue has more than doubled as Mercuria expanded beyond oil into metals, concentrates and agricultural commodities.
The company’s 2013 trading volumes rose 7 percent from a year earlier to 195 million metric tons of oil or oil equivalent, the company said on the website. Mercuria didn’t disclose a profit figure.
Net income in 2012 was $343 million, according to a copy of the company’s consolidated financial statements obtained by Bloomberg News.
Gunvor, which is also expanding into non-oil commodities, said April 16 that its 2013 net income rose to $308 million from $301 million the year before as trading margins improved.
From 2011 to 2013, Mercuria hired 570 people, including executives from investment banks such as Goldman Sachs and Barclays Plc. That boosted staff to 1,200 from about 10 in 2004.
After agreeing to purchase JPMorgan’s unit on March 19, Mercuria is now deciding which employees will be offered positions. The unit has about 500 staff. Blythe Masters, the head of the bank’s global commodities operations, will leave once the sale is completed.
The unit will give Mercuria gas and power trading operations on both sides of the Atlantic, physical assets spanning 40 locations in North America, an oil-trading book with a supply and offtake contract at the largest refinery on the U.S. East Coast, and 6 million barrels of storage leases in the Canadian oil sands.
To contact the reporter on this story: Andy Hoffman in Geneva at firstname.lastname@example.org