BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry

« News Home
:: Monthly Archive

News Topics
:: Air Pollution
:: Agreements & M&A's
:: Alternative Fuels
:: BunkerBlog
:: Cargoes & Storage
:: Company News
:: Efficiency, Costs & Charges
:: Environment
:: Events
:: Financial
:: Fuel Quality & Testing
:: Lubes & Additives
:: Oil Spills
:: People
:: Port News
:: Projects
:: Regulation, Legal
:: Services, Products,Technology
:: Statistics & Research
:: Vessels

Regional Archive
:: Americas
:: Asia/Oceania
:: Europe
:: M.East/Africa

BUNKER INDEX :: Price Index, News and Directory Information for the Marine Fuel Industry
Home » News

Aegean defines strategy to improve gross spread

Plan includes escalating business in ARA and Germany and 'cherry-picking' volumes in Los Angeles.

Aegean Marine Petroleum's delivery vessel the Amorgos. Image credit: Aegean Marine Petroleum

Updated on 09 Mar 2018 12:18 GMT

Aegean Marine Petroleum Network Inc. (AMPNI) provided further insight into how it intends to improve sales margins and profitability during the management's quarterly analysis of the company's performance on Thursday.

The bunker firm's gross spread per metric tonne of marine fuel sold has plummeted in recent years, with the company posting a 2017 figure of $15.8 - down 19 percent on the previous year.

A summary of the company's annual gross spread over the last five years has been provided below.

Year Gross spread ($/mt)
2017 15.8
2016 19.5
2015 22.0
2014 26.5
2013 25.4

In an effort to raise profitability, the company has focused on repositioning its portfolio towards higher margin business, and in the fourth quarter (Q4) managed to raise the gross spread by 6.2 percent (to $15.5) on the previous quarter's $14.6 result - the lowest since AMPNI was founded in 2005; however, the figure was still 26.5 percent below the $21.2 posted in Q4 2016.

NYSE-listed Aegean is now actively seeking to replace Singapore and Fujairah volumes with sales in more profitable locations. President Jonathan McIlroy said that a key element would be the expected expansion in volumes in the Amsterdam-Rotterdam-Antwerp (ARA) region in 2018, where sales are currently said to be more than 400,000 tonnes per month.

Also part of the strategy is an escalation of business in Rostock, Kiel and Hamburg. Additionally, the plan is to reduce delivered volumes in low-margin areas such as Los Angeles, which would be replaced with sales elsewhere in the existing supply network, or in newly added physical locations, such as Savannah.

Another tactic to improve the gross spread, according to McIlroy, will be to "cherry-pick" volumes in Los Angeles as the scale of the company's business there is reduced.

"We have analyzed the business in-depth and built a strategy for the [Los Angeles] station that focuses on targeting higher-margin business," McIlroy explained.

McIlroy also confirmed on Thursday that the company's move to "a new and smaller storage facility that better corresponds to our business needs" in Los Angeles is now complete.

Furthermore, McIlroy stated that Aegean had successfully renegotiated contracts for core supply locations in late 2017 for the whole of 2018, with some of those contracts extended into 2019. They were said to include "top liner and car carrier customers for the ARA region".

The bunker seller is also in the process of renegotiating other contracts in the ARA region and on the US East Coast, McIlroy noted.

Related Links:

Aegean could sell Fujairah storage terminal: CFO
Aegean set to terminate physical bunker operation in Fujairah
Aegean posts 2017 loss as YoY gross spread plummets
HEC overview and reasons for Aegean acquisition
Aegean buys Melissanidis-owned firms; founder's group to become biggest shareholder
Aegean Marine Petroleum S.A.

Latest News:

IMO approves Initial Strategy follow-up programme
Renewable methanol offers long-term CO2 reduction solution: MethaShip
Oil and fuel oil hedging market update
Oil slips on likely rise in Saudi output and weekly oil stocks
Verifavia signs up Wallem and Seaborn
ExxonMobil launches cylinder oil for IMO 2020 fuels
The lowdown on bunker spill paperwork required in Singapore
MEPC 73: HFO ban events scheduled
Oil and fuel oil hedging market update
Brent climbs above $80 as supply concerns take centre stage
MEPC 73: IMO must renew commitment to Arctic HFO ban | CAA
IMO launches toolkits to tackle ship and port emissions

Page Links:

Latin America
Middle East
North America
North Europe
South Europe
Index Summary
Price Highlights
Las Palmas
New Orleans
Rio de Janeiro
Latest News
Middle East
Air Pollution
Agreements & M&A's
Alternative Fuels
Cargoes & Storage
Efficiency, Costs & Charges
Fuel Quality
Lubes & Additives
Oil Spills
Port News
Services, Products, Technology
Statistics & Research
Contact & Terms
Contact Us
Terms & Conditions
Privacy Policy
Upcoming Events