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World Fuel Services held an earnings call on Wednesday, July 27, which followed the announcement of the company's second-quarter results on the same day. Please find below some of the key comments made by chief executive officer (CEO) Michael Kasbar and chief financial officer (CFO) Ira Birns.

Marine segment overview

Michael Kasbar: "Our marine segment continued to experience weakness in the shipping industry with uncertainty around the timing of any meaningful recovery. There is a heightened focus in the industry on financial stability and liquidity as well as counterparty risk as this prolonged industry-wide downturn weighs on the entire sector. As such, we're focused on reducing our cost structure to be aligned with the current realities while remaining well-positioned for growth in the longer-term.

"During this extended period of market stagnation, our deep understanding of the underlying physical market, strong balance sheet, and singular global organization has helped us maintain market share and a profitable business by delivering a unique set of highly customized solutions to our clientele."

Marine segment results

Ira Birns: "We generated gross profit of $40 million - down $2 million or 5% year-over-year. The trends that began more than a year ago of considerably lower fuel prices, a weakened offshore market, and lower price volatility continue to impact overall unit margins to what remains a challenging marine market. While fuel prices increased during the second quarter, we only experienced modest improvement in our core marine resale business and we really didn't see any meaningful uptick in demand for price risk management products during the quarter. With that being said, we do expect to benefit from some seasonal business activity in marine in the third quarter which should drive some improvement in marine results."

Marine volume sold

Ira Birns: "Volume in our marine segment for the second quarter was 8.2 million metric tons, a decrease of approximately 200,000 metric tons, or 2% year-over-year. While marine volume is down year-over-year, it returned to its highest level since the third quarter of 2015. Brokered business activity for the quarter was approximately 12% of total marine volumes, as compared to 13% in the second quarter of 2015."

Third-quarter marine forecast

Ira Birns: "In marine, we unfortunately don't expect a whole lot of improvement based upon where the market is today and where the market has been. But we do have some seasonal business that we also had last year that's specific to one individual contract that comes through in the third quarter that should add a couple million dollars of profitability to marine in the third quarter. Aside from that, we're not necessarily expecting much more."

Acquisitions

Greg Lewis, Credit Suisse (Question): "Should we think about acquisitions being on hold as sort of the company looks internally to rightsize itself?"

Michael Kasbar (Answer): "Absolutely not... So organic growth obviously is something that we're pretty seriously focused on and that's where some of the folks that we brought into the company are driving that in a systemic way; leveraging technology is an enormous driver in this company. But our capability on the acquisition side is significant. Ira has brought on some additional folks, so we feel pretty good about that, so we're not going to stop and I think that our acquisition and integration capabilities have just gotten stronger and... we're about to continue that dynamic as we expand our EBITDA and our capability."