Marine fuel and lubricants supplier
Aegean Marine Petroleum Network Inc.(AMPNI) has posted an increase in profit for the second quarter of 2008, driven mainly by a substantial rise in the gross spread on marine petroleum products.
The company recorded a net income of $9.9 million, or $0.23 per share, for the three months ended June 30th 2008 compared to $7.0 million, or $0.17 per share in the same quarter last year.
Operating income for the second quarter of 2008 was $12.4 million compared to $7.1 million for the same period in 2007.
Total revenues for the three months ended June 30th 2008 increased by 162.2 percent to $741.0 million compared to $282.6 million during the second quarter of 2007. Sales of marine petroleum products soared by 161.7 percent to $738.6 million compared to $282.2 million for the year-earlier period.
Results for the second quarter of 2008 were driven by a 96.5 percent increase in the gross spread on marine petroleum products to $39.3 million compared to $20.0 million for the same period in 2007. For the three months ended June 30th 2008, the volume of marine fuel sold increased by 55.0 percent to 1,232,438 metric tonnes compared to 795,282 metric tonnes in the year-earlier period, as sales volumes improved significantly in the company's service centers located in Greece, the United Arab Emirates and Singapore.
Second quarter results also included sales volumes from Aegean's acquired service centers in Northern Europe and Portland (UK) which commenced revenue-generating activities in October 2007 and April 2008 respectively, as well as sales volumes from Aegean's new service center in West Africa which was established in January 2008.
The gross spread per metric tonne of marine fuel sold increased to $31.7 per metric tonne during the last quarter, compared to $25.1 per metric tonne in the prior year quarter.
Operating expenses, excluding the cost of fuel and cargo transportation costs, increased to $29.3 million compared to $16.0 million for the second quarter of 2007. This increase was principally due to a larger fleet of bunkering tankers and floating storage facilities owned and operated by the company during the second quarter of 2008 compared to the same period last year.
Speaking about the results, AMPNI President
E. Nikolas Tavlarios said "Our strong performance in the second quarter demonstrates management's success in expanding Aegean's logistics infrastructure and penetrating new markets. In addition, we once again utilized our disciplined approach to grow our global service center network with the acquisition of ICS Petroleum, which closed on July 1st 2008 and is expected to be immediately accretive to earnings and cash flows.
"Upon completing this acquisition, which provides a critical bunkering presence in North America, Aegean has more than doubled its global network for the physical supply of marine fuel over the past two years. Complementing this robust growth, we continue to significantly increase our delivery capacity with the addition of three double-hull bunkering tanker newbuildings to date this year. We remain on track to take delivery of 24 remaining newbuildings over the next two years under our well-capitalized growth plan, increasing our modern bunkering fleet to 52. By further expanding our full-service marine fuel platform, we expect to capitalize on the positive industry fundamentals and drive long-term sales volume growth."
For the six months ended June 30th 2008, AMPNI recorded a net income of $17.4 million, or $0.41 per share, compared to $13.6 million, or $0.32 basic per share, during the same period in 2007.
Total revenues for the first six months of this year increased by 156.4 percent to $1,273.0 million compared to $496.4 million in 2007. Sales of marine petroleum products increased by 156.9 percent to $1,269.0 million compared to $493.9 million during the first half of 2007.
Results for the six months ended June 30th 2008 were led by a 86.4 percent increase in the gross spread on marine petroleum products to $71.0 million compared to $38.1 million for year-earlier period. The volume of marine fuel sold increased by 51.5 percent to 2,292,572 metric tonnes compared to 1,513,727 metric tonnes in the first half of 2007.
The gross spread per metric tonne of marine fuel sold increased to $30.8 per metric tonne, compared to $24.9 per metric tonne during the first six months of last year.
Operating income for the six months of 2008 was $20.9 million compared to $13.1 million in the same period in 2007. The increase in operating income was attributable to higher gross spreads (i.e. net revenues) partially offset by higher vessel operating expenses as well as higher general and administrative costs.
Commenting on AMPNI's financial performance,
Ziad Nakhleh, Chief Financial Officer, said "Our sound financial performance for the second quarter of 2008 was a direct result of our net revenue growth exceeding the growth in our operating and financing costs. Sales volumes improved significantly in our service centers located in Greece, Singapore and the United Arab Emirates and we realized fresh volume contributions from our new service centers in Northern Europe, the U.K. and West Africa.
"Our enhanced sales volumes were generated during a period of record-high marine fuel prices and, as a result, we drew upon our revolving credit facilities to finance the associated working capital requirements. Going forward, we believe Aegean's considerable financial flexibility combined with the execution of management's growth strategy bodes well for the Company to continue to improve its operating leverage for the benefit of shareholders.
