Leading bunker supplier
Chemoil has today announced that it generated a net loss attributable to equity holders for the full year 2010 of US$9.5 million - a result which was said to be due mainly to the losses incurred in the first quarter of 2010 and the slow pace of margin recovery throughout the year. The net loss for the year was US$21 million below the US$11.5 million profit achieved in 2009.
For the fourth quarter of 2010, Chemoil announced a profit before tax of US$ 3.7 million. One-time write-offs, including US$ 5.1 million for deferred tax assets of a subsidiary, resulted in a net loss attributable to equity holders of US$1.8 million for the quarter, down US$4.7 million on the US$2.9 million profit achieved during the last quarter of 2009.
Chemoil said the fourth quarter result was the strongest operating performance by the group in 2010 with its gross contribution per metric tonne (GCMT) reaching US$6.70 per tonne, up from US$6.30 per tonne in the fourth quarter of 2009. However, for the full year to December 2010 gross contribution per tonne declined by 29 percent to US$4.8 per tonne, down from US$6.8 per tonne the previous year.
Full year sales volumes rose by 500,000 tonnes, or 3 percent, to 15.6 million metric tonnes. Sales during the fourth quarter increased by 100,000 tonnes, or 3 percent, to 4.1 million metric tonnes,
Sales revenue increased by US$1,545.3 million, or 27 percent, in the full year to December 2010 to US$7,295.5 million, up from US$5,750.2 million in 2009. During the fourth quarter of 2010, revenue rose by US$151.6 million, or 8.2 percent, to US$1,991.4 million, up from US$1,839.8 million in the corresponding period a year earlier.
Commenting on the results, Chemoil’s Executive Chairman,
Mike Bandy, said: "In the fourth quarter of 2010, we producedour best quarterly operating results for the year as the fruits of our operational improvements and cost cutting efforts began to take shape. However, we also decided to take conservative actions by making one-time write-offs which will better position the Chemoil Group going forward financially as the marine fuel margins begin to recover. The largest of the write offs is a US$ 5.1 million deferred tax asset of a subsidiary. In addition, there were other provisions taken for certain bad debts in one of our non-core subsidiaries.”
"Sales volume growth to the shipping segment continued to show strong performance in FY2010 as retail sales grew 6% and ex-wharf sales, which are ultimately sold to the shipping market, grew 60%. However, our business continued to be exposed to weak wholesale-retail margin spreads, although signs of improvement have been showing during the latter part of 2010 as reflected in our 4Q2010 results," the company said.
Chemoil’s Chief Financial Officer,
Jerome Lorenzo, said: “We have continued to improve our
operational efficiency through a rationalization of our operating assets resulting in better utilization rates
in certain ports. These can be seen for example in the reduction in our barging and pipeline costs in 4Q2010, as well as in other expenses, after eliminating the one-time write-offs.”
Bandy concluded: "Since the time the Group’s performance was impacted by weak margins in 3Q2009 and 1Q2010, we have made significant improvements in our core operations. We have also taken a careful look at our assets and decided to take prudent measures to strengthen our financial condition going forward. These positive developments form the backdrop in which I pass the leadership baton to Chemoil’s new CEO, Mr Tom Reilly. While continuing to implement operational changes and refine the Group’s cost cutting measures, Mr Reilly will undoubtedly be able to focus on growing the Chemoil global franchise, such as the recent acquisition of OceanConnect Marine. The Group can also focus on realizing profit generating opportunities in a margin environment that is now showing some signs of improvement.”
