Goldman-Backed Trader InCommodities Reports 840% Jump in Profit

(Bloomberg) -- InCommodities A/S, a Danish trading firm backed by Goldman Sachs Group Inc., reported a ninefold increase in profit last year as it benefited from record price volatility triggered by the energy crisis.

The surge in pretax profit to €1.37 billion ($1.5 billion) from €146 million reflects the market turbulence caused by Russia’s invasion of Ukraine, which sent prices for power and gas soaring. Other commodity traders — from Vitol Group to Mercuria Energy Group Ltd. — also posted bumper earnings for 2022.

The market gyrations were a “100-year event” as Covid restrictions, stimulus packages and the war in Ukraine all combined to cause wild price swings, InCommodities Chief Executive Officer Jesper Johanson said in an interview. As such, he doesn’t expect that level of profits to be repeated.

“We’ve seen prices and volatility come down quite significantly across the whole energy spectrum,” Johanson said. “It’s probably true for most companies involved in energy trading that it’s going to be a different year than in 2022.”

InCommodities, founded in 2017 in Aarhus and focused on Europe and the US, will tap some of its earnings to expand in Asia. It’s active in 20 power markets and more than a dozen gas markets, and is developing its first solar park in its home city.

“We’re setting up an office in Singapore as we speak, and we’re looking very intensively at the Japanese market to see how we can apply our skill-set and our way of managing assets there,” Johanson said.

Another Aarhus trader, MFT Energy P/s, said Wednesday it’s looking to sell a stake. But Johanson doesn’t plan to follow suit. Goldman holds just over 5% of the company, while 85% is owned by management and staff.

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