The wholesale trading activity was launched in Lugano by the Duferco Group in 2005 as part of a diversification process from the steel business and since then it has continued to increase its activities.
Over the years, the trading desk of DufEnergy Trading SA has developed into a structured organization capable of dealing with increasingly higher volumes of gas, power and environmental products.
With a goal to maintain a carefully diversified portfolio, DufEnergy Trading SA has focused on generating value by capturing opportunities as they arise in the marketplace, typically acquiring short and medium term assets, such as cross-border interconnection power and gas capacity rights, as well as flexibility tools, such as virtual and/or physical gas storage capacities throughout Europe, in order to profit from changes in demand/supply dynamics across regions.
DufEnergy Trading SA has grown significantly during the 2014 fiscal year, with the number of active counterparties increasing from 180 to 250 and the annual traded volumes reaching 120 TWh for gas and 36 TWh of power with an aggregate annual turnover that, compared to the prior fiscal year, increased from 2 billion to 3.6 billion EUR.
In general the objective of the Company is to thrive in this ever-changing marketplace and to seize the arbitrage and cross border opportunities that arise on a daily basis. The key element needed to support such decisions and at the same time benefit from a real-time updating of the actual portfolio position, is a sophisticated risk-management system which is constantly developed and improved to achieve the best possible control over the risk/return profile of the Company’s portfolio, allowing informed decisions both on a strategic and on an operational day-to-day basis, in line with what management and shareholders deem to be an acceptable balance of risk and return.
Instrumental to such control and reporting activity is a strong IT infrastructure, carefully managed and developed by a dedicated team of people which has grown substantially over the past fiscal year.
DufEnergy Trading SA has seen a marked increase of resources in every area of its operations. By the end of the fiscal year the headcount has reached 55 people from 15 countries, all of whom have been carefully selected, based on their strong academic qualifications and their depth of experience, in order to ensure that in all areas of the business, highly skilled and motivated people work towards a common goal.
During FY 2014 the geographical reach of the Company’s business has also extended into new markets that are believed to present substantial growth potential. On one hand the expansion has followed the past trend aimed at gradually increasing coverage towards eastern European countries.
On the other hand DufEnergy Trading SA has also seized an opportunity to acquire a 37.5% participation in Matrix Energia, a power trading startup in Brazil, set-up and led by an experienced team of individuals with many years of knowledge of the local market. Duferco’s objective in this partnership, in addition to making a substantial return on the investment, is to acquire an understanding of this highly volatile market through a direct experience, and more broadly to understand the potential of the Brazilian and other South American energy sectors.
In addition to extending its geographic reach, DufEnergy Trading SA is also constantly assessing the possibility of entering into new commodities markets, which may present synergies with its current business. An example is the LNG (liquefied natural gas) market, closely monitored by DufEnergy Trading SA, where we have registered as a shipper at French and Spanish terminals, executing Master Sales & Purchase Agreements with a number of counterparties, in a view of executing deals as soon as market conditions are deemed to be suitable.
DufEnergy Trading SA also acquired a 45% participation in NEO Operations Limited, a London-based Company operating in the oil trading business. This business will be developed carefully taking full advantage of our very experienced partner and adding value where appropriate.
In line with this approach, Duferco also continues to develop its mini-merchant interconnection lines between Italy and neighbouring countries. In particular, the medium voltage cross-border line between southern France (Menton) and Italy (Ventimiglia), currently under development in cooperation with ERDF and Enel, has received the necessary building permits during the course of FY 2014, both on the Italian and on the French side.