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UPDATE 2-Trafigura profit leaps as oil and gas trading offsets losses at associates

Julia Payne and Dmitry Zhdannikov

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* Net profit jumps 92 percent

* Metals trading contribution down by a third

* Puma, Porto Sudeste and Nayara all post losses

* Adjusted debt rises (Adds detail)

LONDON, June 11 (Reuters) - Trading house Trafigura's six-month net profit jumped by 92% after strong performance from its oil and gas desks helped to offset weakness at the metals division and losses at key associates.

The company attributed the profit leap to favorable market conditions, strong U.S. oil exports and its own oil desk's restructuring.

Rivals such as Vitol and Gunvor have also signaled good profits in early 2019 as oil price volatility created a favorable market structure after a tough trading year in 2018.

"Our performance was also enhanced by our market-leading position in strategic commodity flows, notably the increase in exports of crude oil and liquefied natural gas from the United States," Trafigura said.

Net profit for the six months to March 31 was $425.7 million, up from $221.8 million in the same period a year earlier, the company said on Tuesday. Core earnings (EBITDA) were up 69% at $1.1 billion, with gross profit rising 50% to $1.47 billion on flat revenue of $86 billion.

On the downside, the metals and minerals book's contribution to gross profit fell by about a third to $437 million while key associates posted losses.

LOSSES AT ASSOCIATES

Trafigura said it had combined losses of $104.3 million at its mid-stream company Puma Energy, Brazilian iron ore port Porto Sudeste and Tendril Ventures (Nayara Energy), its Indian refining venture with Russia's Rosneft.

Associates such as Puma, which Trafigura calls equity accounted investees because its stakes are less than 50%, constitute half of Trafigura's equity - $3.33 billion out of total group equity of $6.56 billion.

Trafigura needs to maintain a healthy level of equity as a guarantee against debt with its bank lenders.

Its total debt - the heaviest among trading houses - rose to $32.7 billion from $32.2 billion over the six-month period.

Adjusted debt, which excludes inventories and securitisation programs and is the companys preferred metric, rose to $7.59 billion from $6.04 billion. As a result, the debt to equity ratio worsened to 1.16 times from 0.97 times.

Despite net losses at associates, Trafigura did not book impairments on its investments in Puma, Porto Sudeste and Nayara.

The only impairment was for $35 billion on its investment in Nyrstar after financial restructuring and recapitalisation of the metals business.

"Trafigura has been delaying the impairment of Puma and other associates despite losses," said Arnaud Vagner, founder of short-seller Iceberg Research.

Trafigura has said impairments are not needed and it is basing the carrying value of its stakes on future cash flow modeling.

Trafigura's total traded oil and refined product volumes fell 7 percent year on year to average 5.5 million barrels per day, making it the world's second-largest oil trader behind Vitol. Metals and minerals volumes rose 3 percent. (Reporting by Julia Payne Editing by Mark Potter and David Goodman)