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Danish trader InCommodities reports a 47% decline in profit annually as trading slows

Danish trader InCommodities reports a 47% decline in profit annually as trading slows

InCommodites - a Danish energy trading company backed by Goldman Sachs - reported on Monday a 47% decline in its pretax profits for 2024, citing lower volatility and fewer trading opportunities.

The company's profit before taxes was 72.5 million euro ($82.28) down from 136.4 millions the previous year. This is its lowest level since 2020, but it still falls within a range of target of 50 to 140 million euro.

It has predicted a profit before tax of 85 to 195 millions euros for 2025.

The company's report stated that "the 2024 performance was shaped primarily by a smaller number of transactions, and tighter margins due to the fact that gas and electricity prices remained stable and relatively low with few fluctuations."

InCommodities' gas trading volume fell from 947.7 terawatt-hours (TWh), in 2023, to 660.5 TWh last year. Meanwhile, power trading volumes increased to 295.6 from 213.7 TWh.

Jesper Johanson, Co-Founder and Chairman of the company, said: "We're seeing a more balancing energy market. Supply and demand are meeting to a greater degree than in 2022 or 2023."

He said that the average energy price in Europe is still high, and this affects the competitiveness of the region compared to the rest of the world.

Johanson stated that InCommodities also wants to achieve a greater integration of market assets, such as solar, wind and batteries. Johanson added that small-scale nuclear power plants could be included in the future. However, it is important for baseload production to react quickly during periods of low prices.

Goldman Sachs, among other investors, owns a 15% stake in the company. The company is expanding worldwide, particularly in Asia Pacific. Reporting by Nora Buli, Editing by Terje Sollsvik and Rachna uppal

(source: Reuters)