CEFC's Q4, full-year revenue and earnings jump on arbitrage opportunities

CEFC International, which trades petroleum and petrochemical products, on Thursday posted a 16-fold jump in its net profit to US$7.6 million for its fourth quarter. A year ago, it had made just US$463,000.

Revenue jumped eight times to US$286 million, from US$35.3 million a year ago. Earnings per share swelled to 0.18 US cents, from 0.013 US cents a year ago.

For the full year, net profit jumped 25 times to US$17.9 million, while revenue rose 45 per cent to US$474.5 million, due to the group's "active exploitation of arbitrage opportunities", which not only increased the trading volumes, but also its profitability and competitive position, it said.

"During the year, the group entered into an agreement with CEFC Shanghai International Group Limited to act as its exclusive overseas procurement and supply platform for all oil-related commodities, in order to build up its long-term sustainable trading flow.

"The increase in revenue was also due to significant contributions from structural derivatives trades with the group capturing the market volatility and optimising the trading positions."

Higher earnings were a result of higher volume of physical trading and higher gross profit resulting from derivatives trading.

The counter fell half a cent or 1.7 per cent to S$0.295 on Thursday. The stock has run up tremendously, from just S$0.027 in July 2015, and has attracted several SGX queries over its trading.