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BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
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Aegean posts profit drop as 'sales margins remain under pressure'

11 Aug 2017 00:02 GMT

Sales volume rose by 9.3% and 7.5% in Q2 and H1 respectively.



Aegean Marine Petroleum Network Inc. reports that net income attributable to shareholders during the second quarter (Q2) fell by $11.8 million to $1.7 million compared to the corresponding period last year, whilst net income for the first half (H1) of the year dropped $22.2 million to $3.1 million.

The decline in profit was recorded despite a year-on-year (YoY) Q2 revenue increase of $453.1 million, or 45.9 percent, to $1,400.6 million. H1 revenue was up $1,224.4 million, or 70.3 percent YoY to $2,964.9 million.

Q2 sales volume rose 381,705 metric tonnes, or 9.3 percent, to 4,474,494 tonnes; and between January and June, Aegean sold 8,924,757 tonnes - a YoY increase of 619,332 tonnes, or 7.5 percent.

Aegean said the gross spread per metric tonne of marine fuel sold - the margin the company generates on sales of marine fuel - fell to $16.8 in Q2 compared to last year's figure of $20.9. The H1 metric, meanwhile, was down from $19.2 to $16.6 YoY.

Commenting on the results, Jonathan Mcilroy, Aegean's recently appointed president, said: "During the second quarter of 2017, we continued to see challenging market conditions across the shipping and marine fuel space. While demand for marine fuel remains high, sales margins remain under pressure by a combination of low oil prices, depressed commercial shipping freight rates and fierce competition on the supply side."

In a sequential comparison with Q1 results, Mcilroy noted: "Compared to Q1 2017, the Company achieved higher sales volume with improved profit margins. Furthermore, we reduced operational expenses and improved our profitability. While more work remains to be done in the cost reduction area, we are on our way to executing on specific initiatives, positioning us well to benefit from any market upturns."

On the issue of cost reduction, Spyros Gianniotis, Aegean's Chief Financial Officer, remarked: "We have already implemented measures that will result in annual savings of approximately $7 million as of Q3 2017. We are targeting another $13 million of cost reduction by reshuffling the older vessels and controlling other administrative expenses."

As regards financing, Giannotis confirmed: "As of last week we renewed for another year the Aegean's USA facility of $250 million and we are currently working to renew the global facility for the rest of the business. Both facilities have been or will be extended at improved terms."

Commenting on the company's growth plans, Mcilroy said: "We are further leveraging Aegean's global infrastructure and branding by pursuing a growth strategy that does not require intensive capital expenditures. We seek to enter new areas or to maintain our presence in key hubs by teaming with local operators."






Related Links:

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Aegean Marine Petroleum launches trading office in Dubai
Aegean Marine Petroleum launches bunker supply operation in Savannah
Aegean appoints interim chairman and president as Georgiopoulos steps down
Stock market reacts positively to Aegean's move for new president

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