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Andatee China Marine Fuel Services Corporation, a company engaged in the production, storage, distribution, trading of blended marine fuel oil for cargo and fishing vessels in China, today (November 14) announced a net income of $125,282 for the three months ended September 30, 2014 compared to a net loss of $542,859 for the corresponding period in 2013.

Andatee said the rise in net income was a direct result of an increase in revenues, a decrease in general and administrative expenses, and the partial offset brought by an increase in interest expense.

The company's revenue increased by $84.7 million, or 137.6%, to $146.3 million between July and September, up from $61.6 million during the same period last year. Andatee said the rise was directly correlated to the increase in sales volume from 121,573 tonnes during the third quarter of 2013 to 186,782 in 2014 - a jump of 65,209 tonnes, or 53.6%.

The best-selling fuels during the third quarter were blends #1, #4 and 120 centistoke (cSt), Andatee said, which accounted for 24.1%, 34.5%, and 34.8% of total fuel sold, respectively.

"These fuels are very competitively priced in the market as these blends of fuel appeal to a broad range of fishing and cargo vessel," Andatee said in its earnings statement.

Gross profit increased by $2.2 million, or 44.9%, to $7.1 million for the quarter ended September 30, 2014 compared to $4.9 million in 2013. As a percentage of revenues, gross profit margin was 4.9% in the third quarter of 2014 compared to 8.0% last year.

Andatee said the higher gross margin was mainly due to the increase in sales volume compared to the same period of 2013, however the lower gross profit percentage was due to "increased unit costs affected by higher purchase costs resulting from international crude oil price fluctuations, plus the shifting of the company's sales mix from the retail side to the wholesale side," the bunker supplier stated.

Andatee added: "Our Chairman and Chief Executive Officer, Mr. Wang Hao commented that the Company will continue its efforts to strengthen its bottom line. He further noted that the Company's positive results these past two quarters were a function of the Company's executing its business plan. In early 2014, the Company augmented and refined its business plan whereby the Company allocated more of its resources to its wholesale fuel business and focused on increase sales volume with its distributor customers located in the provinces of Shanghai, Zhejiang and Shandong. Following these steps, the Company's revenues in Q3 2014 have increased significantly as compared to the same quarter in 2013. Year to date revenue at September 30, 2014 grew by 90.5% as compared to same nine month period in 2013."

Last month, U.S. financial services firm The Street, Inc. downgraded shares of Andatee China Marine Fuel Services from a 'hold' to a 'sell' rating in a research report sent to investors on Monday, October 21.

In a statement, The Street said last month: "We rate Andatee China Marine Fuel (AMCF) a Sell. This is driven by multiple weaknesses, which we believe should have a greater impact than any strengths, and could make it more difficult for investors to achieve positive results compared to most of the stocks we cover. The company's weaknesses can be seen in multiple areas, such as its generally high debt management risk, disappointing return on equity and poor profit margins."

Shares of Andatee were today trading at $1.69 per share, down $0.01 on the previous day's close. The 52-week range is $1.15 to $3.65 per share.