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SGX mainboard-listed Chemoil, one of the world’s leading suppliers of marine fuel, has today announced a net profit of US$2.6 million for the third quarter of 2010, a year-on-year rise of $15.2 million on the $12.6 million loss recorded during the corresponding period last year.

Year-on-year third quarter sales revenue rose $64.6 million, or 4 percent, to $1699.8 million, whilst revenue for the first nine months of this year was up 36 percent, or $1393.6 million, to $5304.1 million in a comparison with the year-earlier period.

Operating performance continued to improve with gross contribution per metric ton (GCMT) reaching US$5.6 per tonne during the third quarter, up from US$5.0 per metric tonne and US$1.7 per tonne during the previous two quarters. The figure was also $4.8 higher than the $0.8 per tonne recorded during the third quarter of 2009. However the GCMT of $4.1 per tonne posted for the first nine months of this year was 41 percent below the $7.0 per tonne achieved during the same period in 2009.

Third quarter sales volumes were 3.8 million metric tonnes, up 0.1 million tonnes, or 2.7 percent, on last year, whilst volumes for the first nine months of the year rose 0.4 million tonnes, or 2.6 percent, to 11.5 million tonnes.

Sales volumes were positively impacted by the stronger performance of retail fuel sales in the shipping segment, up 4.5 percent to 2.3 million tonnes during the third quarter and up by 9.1 percent to 7.2 million tonnes for the first nine months of 2010.

Chemoil’s Chairman and CEO, Mike Bandy, commented: "It was an improved net profitability performance this third quarter following a difficult start to 2010, however our business continues to be exposed to weak wholesale-retail margin spreads caused by oversupply and weak demand in some of our port locations.

"While Chemoil continues to perform better despite challenging economic conditions, we are starting to capture some of the benefits of recovering demand in specific sectors, namely our core shipping market. Our retail and ex-wharf marine fuel sales in Asia continue to increase in the third quarter. Overall, we are on the right path as our strategies position us to grow profitably and as markets continue to improve."

Chemoil’s Chief Financial Officer, Jerome Lorenzo, said: “The effectiveness of our strategy to improve operational efficiency is becoming more evident in our net profitability and remains an important component of our ongoing process. We also remain focused on measures that have enabled us to lower overheads, with the benefits now becoming more visible in operational areas like storage and barging.”

Bandy concluded: "As wholesale-retail spreads remain challenging, we will continue to drive our business towards improved profitability, higher sales volumes, and reduced operational costs. These operational improvements increase our readiness to maximize growth opportunities as we move towards more favorable market conditions.

“We have seen in the past two months there have been a number of positive developments for Chemoil including the establishment of a new regional operations office in New York; proceeded with the fourth phase of construction of what would be Chemoil’s largest global storage facility in Fujairah through our joint venture with Gulf Petrol Supplies LLC; and the launch of our expanded offering to include risk management products and services to our shipping customers as a fitting complement to our core physical fuel delivery.”