* Net profit jumps 92 percent
* Metals trading contribution down by a third
* Puma, Porto Sudeste and Nayara all post losses
* Adjusted debt rises (Adds cost of funding)By Julia Payne and Dmitry ZhdannikovLONDON, June 11 (Reuters) - Trading house Trafigura'ssix-month net profit jumped by 92% after strong performance fromits oil and gas desks helped to offset weakness at the metalsdivision and losses at key associates.The company attributed the profit leap to favourable marketconditions, strong U.S. oil exports and its own oil desk'srestructuring.Rivals such as Vitol and Gunvor have also signalled goodprofits in early 2019 as oil price volatility created afavourable market structure after a tough trading year in 2018."Our performance was also enhanced by our market-leadingposition in strategic commodity flows, notably the increase inexports of crude oil and liquefied natural gas from the UnitedStates," Trafigura said.Net profit for the six months to March 31 was $425.7million, up from $221.8 million in the same period a yearearlier, the company said on Tuesday. Core earnings (EBITDA)were up 69% at $1.1 billion, with gross profit rising 50% to$1.47 billion on flat revenue of $86 billion.
On the downside, the metals and minerals book's contribution to gross profit fell by about a third to $437 million while keyassociates posted losses.
LOSSES AT ASSOCIATESTrafigura said it had combined losses of $104.3 million atits mid-stream company Puma Energy, Brazilian iron ore portPorto Sudeste and Tendril Ventures (Nayara Energy), its Indianrefining venture with Russia's Rosneft .Associates such as Puma, which Trafigura calls equityaccounted investees because its stakes are less than 50%,constitute half of Trafigura's equity - $3.33 billion out oftotal group equity of $6.56 billion.Trafigura needs to maintain a healthy level of equity as aguarantee against debt with its bank lenders.Its total debt - the heaviest among trading houses - rose to$32.7 billion from $32.2 billion over the six-month period.
Adjusted debt, which excludes inventories and securitisationprogrammes and is the company's preferred metric, rose to $7.59billion from $6.04 billion. As a result, the debt to equityratio worsened to 1.16 times from 0.97 times.Total interest paid rose 30% to $732 million and netfinancing costs also increased by roughly the same percentage to$316 million as borrowings rose and 1-week dollar Libor ratessoared by 68 percent versus the same period last year.Despite net losses at associates, Trafigura did not bookimpairments on its investments in Puma, Porto Sudeste andNayara.The only impairment was for $35 million on its investment inNyrstar after financial restructuring and recapitalisation ofthe metals business."Trafigura has been delaying the impairment of Puma andother associates despite losses," said Arnaud Vagner, founder ofshort-seller Iceberg Research.Trafigura has said impairments are not needed and it isbasing the carrying value of its stakes on future cash flowmodelling.Trafigura's total traded oil and refined product volumesfell 7 percent year on year to average 5.5 million barrels perday, making it the world's second-largest oil trader behindVitol. Metals and minerals volumes rose 3 percent. (Reporting by Julia Payne; Editing by Mark Potter and DavidGoodman)
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