Gunvor’s New CEO Says Profit Rebounded From First Half
(Bloomberg) -- The new head of Gunvor Group — the energy merchant which announced a staff buyout on Monday — said earnings have rebounded from a poor first half amid better trading opportunities and strong oil-refining margins.
After first-half profit slumped 71%, the third and fourth quarters have been “really strong,” Chief Executive Officer Gary Pedersen said in an interview. He’s replacing co-founder Torbjörn Törnqvist, who’s selling his majority stake to senior staff after a roller coaster month in which the US labeled the firm a “puppet” of the Kremlin.
Pedersen’s comments are the latest sign that performance at some of the top energy trading houses has picked up following a torrid start to the year, when conflict in the Middle East and surprise policy announcements from the Trump administration wrought havoc on oil and gas traders’ positioning. Gunvor in August bemoaned a “complete upheaval of outright prices and spreads” when it reported net income of $120.8 million, its worst half-yearly performance since 2020.
But traders with processing and distribution assets have benefited more recently as refinery outages from Africa to Russia, growing crude supply and better-than-anticipated oil demand pushed up margins to the highest seasonal level in at least seven years. Gunvor itself owns a refinery in Germany and recently invested in a chain of gas stations in Pakistan.
“Refining margins continue to stay super big and we’ve had good arbitrage opportunities,” said Pedersen, a veteran oil trader who started at Gunvor this year and has also worked at Koch Inc. and hedge fund Millennium Management. He didn’t elaborate on the extent of the improvement in earnings.
The head of oil at rival Trafigura Group in September said investments in refining and distribution have helped its oil business as pure trading becomes increasingly competitive and difficult across the industry.
New CEO
As the successor to Törnqvist, Pedersen is taking the reins of one of the oil and gas market’s biggest independent traders. He’s also inheriting a firm that has been rebuilding its oil-trading team after taking losses on some trades last year.
Gunvor’s improved earnings will also be important for payments to Törnqvist, who’s providing a loan to management to part finance the buyout, and which will be paid back over a period of up to 10 years.
“If we can hit and continue to operate at the levels we are at, we are going to be in great shape,” Pedersen said.
Gunvor discloses its details of its financials more publicly than some of its closely held competitors in the trading industry — publishing results for the half and full calendar years in reports on the Euronext exchange, where it has a bond. However, the company said Monday it would repurchase all of the $300 million of notes due in 2026.
A Gunvor spokesperson declined to comment on whether that meant the company would continue to disclose detailed results in future.
(Updates with spokesperson comment in final paragraph. A previous version of the story corrected the location of Gunvor’s refinery in the fourth paragraph.)
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