Diversification "Vitally Important" Says Bunker Holding, as Volumes Surge 31%

Keld R. Demant, CEO of Bunker Holding. Image Credit: Bunker Holding

Keld R. Demant, CEO of Bunker Holding, says diversification of its business to cover trading, brokering, and physical supply is "vitally important", and for the 2015/16 year the strategy has helped it to a 31 percent rise in bunker volumes handled year on year.

"The new initiatives have widened our reach in the market, thus equipping us to retain and consolidate our market position in the years ahead. Accordingly, we have taken important steps during this financial year, and we are pleased to note that the outcome is positive results in all new units and handsome volume growth," said Demant.

As previously reported by Ship & Bunker, Bunker Holding entered into the physical supply business in December 2014, before adding broking to its services with the July 2015 acquisition of LQM Petroleum Services Inc. (LQM).

In comments on the wider performance over the year, Demant noted falling turnover as a result of lower oil prices, but was positive on his company's ability to perform under what has become the new normal for market conditions.

"The price of oil is what it is, and we have clearly demonstrated that we can act in a market characterised by both low prices and an imbalance of supply and demand. We run a tight ship in terms of risk management, which means we hedge all our oil positions to avoid exposure in the event of price fluctuations," he said.

"The fact that we concluded the year with an equity ratio of 35% and equity just under DKK 1.8 billion bears witness to our soundness and robustness."

Demant also noted the expansion of its credit facilities during the period, which as Ship & Bunker reported last September took it to a total of DKK 6.7 billion ($1 billion).

"Even better, the agreement is unsecured, meaning that we do not pledge our assets to the banks. This puts us in a strong position to continue to boost our competitive edge and expand our market share despite the challenging conditions in today's market," Demant concluded.

Overall, Bunker Holding's ultimate parent Selfinvest reported a pre-tax profit of DKK 480 million ($72 million).

The also group includes bunker hedging specialists Global Risk Management.