Trafigura’s Puma Energy to restructure, sell assets -source


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GENEVA, Feb 14 (Reuters) – Puma Energy, the retail and storage arm of commodities trader Trafigura, plans to restructure and sell assets to cut its debt and improve profits, a source familiar with the matter said.

Puma has hired consulting firm McKinsey under new chief executive Emma Fitzgerald who took over last month from Pierre Eladari, who had overseen rapid expansion, the source said.

Although its full-year 2018 results have not been finalised, Puma expects a small net loss or profit, the source added.

Geneva-based Trafigura, which owns about 49 percent of Puma, has had to put plans to list Puma on hold after a change of government in Angola complicated reducing the country’s stake, coupled with weaker profits and a high debt profile.

Angola’s state oil firm and Cochan Holdings, which is run by a former Angolan general, hold the rest of Puma.

A spokesman for Puma declined to comment, while a spokeswoman for McKinsey also declined to comment.

Puma, which traces it roots to Argentina, has more than 3,100 fuel retail stations in Latin America, Africa and Asia-Pacific and last year sold its small Peruvian retail network to Spanish oil and gas group Repsol.

It said in a third quarter investor presentation that it expected a near $200 million drop in earnings before interest, tax, depreciation and amortisation (EBITDA) to $550 million.

“No significant improvements expected until Q1 2019 on margins in Angola, market conditions in Australia, and foreign exchange rates in most of our markets,” Puma said.

Angola, which is Africa’s second-largest oil producer, has struggled with lower oil prices and its Kwanza was the second worst performing currency last year.

This has prompted Fitch and Moody’s to changed their credit rating outlooks for Puma last year to negative from stable. Fitch rates Puma at BB while Moody’s has the firm at Ba2.

“The contribution from its Angola-based operations has been affected by the freeze on refined oil product prices imposed in March 2018 by the Angolan government in the context of its macroeconomic stabilisation programme,” Moody’s wrote.

“As a result, Moody’s expects Puma’s gross profit in Angola to more than halve in 2018, against $270 million … in 2017.”

The International Monetary Fund approved a three-year $3.7 billion credit facility for Angola in early December, saying that Luanda aims to eliminate fuel subsidies by mid-2020.

Puma’s net profit was around $61 million, down from $128 million the year before, as of Sept. 30 last year, while its current and non-current liabilities were nearly $6.2 billion, Trafigura’s annual results showed.

Puma’s net debt by the end of its third quarter last year was just over $1.5 billion and its net debt to EBITDA ratio was 2.6, according to Puma’s results. (Reporting by Julia Payne Editing by Alexander Smith)


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