Danish trader InCommodities posts 47% drop in annual profit as trading slows

OSLO, May 26 (Reuters) - Danish energy trader InCommodites, backed by Goldman Sachs GS.N, reported a 47% drop in its pretax profit for 2024 on Monday, citing fewer trading opportunities amid lower volatility.

The company made a profit before tax of 72.5 million euros ($82.28 million), down from 136.4 million the previous year - its lowest since 2020 but still within a target range of 50 million euros to 140 million euros.

For 2025, it has forecast a pretax profit of 85 million euros to 195 million euros.

"The 2024 performance was shaped by a lower number of transactions and tighter margins as gas and power prices remained relatively low and stable, with fewer fluctuations," the company said in its report.

Gas trading volumes at InCommodities fell to 660.5 terawatt hours (TWh) last year from 947.7 TWh in 2023, while power trading volumes rose to 295.6 TWh from 213.7 TWh.

"We are seeing a more balanced energy market where supply and demand meet to a higher degree than they did in 2022 and 2023," Co-Founder and Chair Jesper Johanson told Reuters.

But average energy prices in Europe are still high and are affecting the region's competitiveness compared to other parts of the world, he said.

InCommodities is also aiming for greater market integration of assets such as wind, solar and batteries, Johanson said, and possibly even small-scale nuclear assets in future, but it was important that even baseload production can react to periods of negative prices.

The company, in which Goldman Sachs and some other investors own a 15% stake, has started a dedicated renewable energy subsidiary to meet growing demand for specialised services, and is expanding globally, especially in Asia Pacific power markets.

($1 = 0.8811 euros)