Trafigura: Strait to the bottom line
Trafigura, along with the other commodity trading giants Vitol and Glencore, tends to keep a pretty low profile until every so often it pops up and announces results that sound a bit like the GDP of a decent-sized country.
The big three thrive on volatility, and there’s nothing like a bit of blood in the streets to get the markets moving, so the conflict in the Middle East has resulted in the biggest bonanza since the Russian invasion of Ukraine.
Its results for the six months to end-March included only one month of the war in Iran, but these came in at just over $4bn, the third-highest six-month period in the company’s history.
CEO Richard Holtum could hardly burst into song with Oh! What a Lovely War, but he did mention coyly that “periods of disruption reinforce our relevance to customers”.
It wasn’t all beer and skittles, however, with the group’s chief economist, Saad Rahim, warning that the Iran war and the closure of the Strait of Hormuz were pushing the global economy towards an inflection point that could plunge it into chaos.
He mentioned that crude oil and diesel prices were 60% higher than before the conflict, a rise that was lower than expected because inventories had been high and governments had been releasing stockpiled fuel, but those buffers were now largely spent, and even if a peace deal materialises soon, it will take months to restore production and shipping flows to pre-conflict levels.
Meanwhile, the world’s second-largest private oil trader will continue to print money.
Accenture: Honesty or hallucination?
There’s a certain Punch & Judy quality to the question of whether AI is a disaster for IT consultants, with the market saying, “Oh yes it is,” and Accenture saying, “Oh no it isn’t.”
Over the past 18 months Accenture’s share price has dropped more than 50% on concerns that AI will be able to carry out many of the tasks that its great army of consultants provide, or at least allow them to rattle them off so quickly that they will have to slash their billing.
Economic uncertainty has led to cautious enterprise IT spending by corporates, which may also be opting to delay projects to benefit from the increasing power of ever more sophisticated AI models.
Traditional consultancies also face the very real threat of OpenAI and Anthropic flexing their gigantic chequebooks to develop their deployment units, which will tweak their products directly to clients’ needs and integrate them with their existing infrastructure.
Accenture, however, is insisting that AI is a huge opportunity for it to sell entirely new categories of work to its long-standing roster of corporate clients. It points out the depth of its relationship with its top 10 ecosystem partners, giants such as Microsoft, Oracle and Amazon Web Services, which drive some 60% of Accenture’s revenue.
It is recruiting AI and data professionals at speed, with 85,000 in the organisation already, as well as completing acquisitions that are complementary to its existing areas of business.
There’s no doubt that AI is redesigning the corporate landscape, and Accenture is hoping it can help.
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