2016 ANNUAL - Trafigura

1 Trafigura GROUP PTE. LTD. ANNUAL REPORT 20162016A N N UA L R EPORTTRAFIGURA GROUP PTE. LTD. ADVANCING TR A DEFINANCIAL ANDBUSIN E SS HIGHLIGHTS* * Trafigura s financial year runs from 1 October 2015 to 30 September 2016 . ** Million metric tonnes. ** EBITDA (earnings before interest, tax, depreciation and amortisation) is operating profit excluding the share in results of equity-accounted investees, depreciation and amortisation, gains/losses on divestments of subsidiaries, equity-accounted investees and other investments, impairment losses and other operating income and expense.** Employee numbers exclude MATSA and Porto Sudeste employees as these assets are deconsolidated from Trafigura s balance sheet.

2 $ $ $41. 2bnGroup revenue (2015: billion)Combined volumeof commodities traded** (2015: )Gross profit(2015: billion)Total assets(2015: billion)65% $ and Petroleum Products revenueas a percentage of Group revenue (2015: 67 percent)Oil and Petroleum Productstotal volume traded(2015: )Gross profit margin (2015: percent)Total non-current assets (2015: billion) 35% $ $ and Minerals revenueas a percentage of Group revenue(2015: 33 percent)Metals total volume traded (2015: )Net profit (2015: billion)Shareholders equity (2015: billion)4 4 .1mmt $ ,107 Minerals total volume traded (2015: )EBITDA** (2015: billion)Average number of employees over year** (2015: 5,248) ADVANCINGTR A DEWithout trade, countries cannot develop, economies cannot grow and international business cannot function.

3 We help make trade move physical commodities from places where they are plentiful to where they are most needed reliably, efficiently and has been connecting its customers to the global economy for more than two decades; we are growing prosperity by advancing Trafigura at a glanceReport of the Board of Directors04 Chief Executive s statement06 Marketplace review10 Financial review16 Business model and structure18 Oil and Petroleum Products Trading23 DT Group24 Metals and Minerals Trading28 Shipping and Chartering30 Impala Terminals32 Mining Group33 Galena Asset ManagementRisk management and funding model34 How Trafigura manages risk38 Finance to meet diverse business needsCorporate governance40 Board of Directors and CommitteesFinancial statements43 Contents for the Financial StatementsThe 2016 ANNUAL Report is complemented by the 2016 Responsibility Report which reflects on Trafigura s

4 Progress in implementing responsible business practices and sets out metrics assessing our performance in managing our Health, Safety, Environment and Communities (HSEC) further information please visit ADVANCING TR A DE2016R ESPONSIBILIT Y R EPORTTRAFIGURA GROUP PTE. 2016 ANNUAL REPORT 01 OVERVIEWTRAFIGURA AT A GLANCET rafigura s core business is physical trading and logistics; our assets and investments complement and enhance these activities. With 61 offices in 36 countries, Trafigura s network extends to every corner of the ACTIVITIES Oil and Petroleum ProductsIn a fragmented market where no single company has a dominant position, we are one of the world s largest traders by volume of oil and petroleum products.

5 Trafigura is one of the few oil and petroleum products traders with global presence and comprehensive coverage of all major markets. The Oil and Petroleum Products Division is supported by offices across the world including in Beijing, Calgary, Geneva, Houston, Johannesburg, Mexico City, Montevideo, Moscow, Mumbai and Singapore. Metals and MineralsWe are one of the world s largest metals and minerals traders. We negotiate offtake agreements with miners and smelters and invest in logistics through our subsidiary, Impala Terminals, to improve market access for our clients. The Metals and Minerals Division is supported by offices across the world including in Geneva, Johannesburg, Lima, Mexico City, Montevideo, Mumbai, Shanghai, Singapore and and Petroleum Products volume traded (2015: ) and Minerals volume traded (2015: )DIVISIONAL PERFORMANCEDIVISIONAL and Petroleum Products volume traded (mmt)Metals and Minerals volume traded (mmt) Shipping and Chartering*Our Shipping and Chartering desk is closely integrated into Trafigura s business model, providing freight services to commodity trading teams internally and trading freight externally in the professional market.

6 Operations are based in regional offices in Athens, Geneva, Houston, Montevideo and Singapore. All post-fixture operations are managed from our Athens ,878 Shipping and Chartering fixtures (2015: 2,744)* Financials relevant to Shipping and Chartering are consolidated within Oil and Petroleum Products/Metals and Minerals trading activities. Metals Minerals02 Trafigura 2016 ANNUAL REPORTOVERVIEWDT GroupDT Group is a business venture between Trafigura and Cochan Ltd. It develops markets in sub-Saharan Africa, with a particular focus on Angola. It works closely with international and local partners in the logistics, trading and natural resources TerminalsImpala Terminals is a multimodal logistics provider focused on export-driven emerging markets.

7 It owns and operates ports, port terminals, warehouses and transport assets. It has particular expertise in providing efficient logistic solutions in challenging environments and hard to reach locations. Mining GroupThe Mining Group manages mining operations, develops projects, conducts technical audits of existing and potential partner projects and provides advisory and support services to Trafigura s trading desks, trading partners and Galena Asset Asset ManagementGalena Asset Management provides investors with specialised alternative investment solutions through its commodity funds. It operates independently, but benefits from the Group s insights into the global supply and demand of *1,625employees473employees13years in operationREGIONAL INFORMATIONNORTH AMERICA6 Offices219 EmployeesMIDDLE EAST2 Offices25 EmployeesASIA & AUSTRALIA12 Offices8 41 EmployeesAFRICA7 Offices393 EmployeesLATIN AMERICA23 Offices2,059 Employees* All employee numbers represent average ANNUAL AND FINANCIAL ASSETS 03 REPORT OF THE BOARD OF DIRECTORSOVERVIEWJEREMY WEIRC hief Executive OfficerA ROBUST PER FOR M A NCE IN CHALLENGING MAR K ET CONDITIONS$ $ revenue(2015: billion)Total non-current assets(2015: billion)$ $ profit(2015: billion)Shareholders equity(2015.)

8 Billion)Group revenue (USD billion) and dynamic change were the watchwords for commodities markets throughout 2016 , as mixed fortunes in the global economy found parts of the resources industry struggling with over-supply and depressed prices. Against this backdrop, Trafigura Group delivered a robust commercial and financial performance in the 12-month period to 30 September 2016 , with significant growth in trading volumes and strong profitability, albeit somewhat reduced from the record trading result achieved in the 2015 financial profit for the year was USD975 million, 12 percent lower than the figure of USD1,103 million in 2015. Gross profit was USD2,291 million, also 12 percent down year-on-year, while revenue was flat at USD98,098 million, compared to USD97,237 million in 2015.

9 EBITDA, which we see as the most accurate measure of operating performance since it strips out investment gains and impairments, was USD1,628 million, down 13 percent on the 2015 figure of USD1,861 remained broadly favourable for trading in the oil market, featuring sustained price volatility and over-supply. The metals market continued to present significant challenges, although some positive signs became visible in some segments in the second half of the year. We were able to build volumes in both our trading divisions, Oil and Petroleum Products and Metals and Minerals, thanks to our global reach, strong commercial relationships and an increasingly diversified global customer base.

10 Competition was intense in all the markets in which we operate, reflected in a reduced gross margin of percent from percent in the same time, the depressed price environment had an adverse effect on our industrial assets, with the result that we decided to write down the balance-sheet value of certain assets. The sum of impairments we made in 2016 amounted to USD365 million, and was partially offset by USD244 million from reversing a prior-year impairment on another AND EFFICIENCY Our strategy in 2016 was unchanged: to grow physical trading volumes and revenues by delivering excellent customer service while managing operational and financial risk and optimising efficiency.