Aegean Marine: Record Sales Volumes & Solid Operational Efficiency in Q1

Aegean

Aegean Marine Petroleum Network announced financial and operating results for the first quarter ended March 31, 2016.

First Quarter Financial Highlights

Recorded record sales volumes of 4,212,636 metric tons.
Achieved gross profit of $80.9 million.
Generated operating income of $18.3 million.
Recorded net income attributable to Aegean shareholders of $11.8 million or $0.24 basic and diluted earnings per share.
Generated EBITDA of $27.1 million.

First Quarter Operational Highlights

Commenced operations in Algoa Bay, South Africa, further expanding global platform.
Operated storage facilities, including the Fujairah terminal, at or near 100% capacity.
Strategically relocated certain vessels from lower-activity markets to higher-growth regions.

E. Nikolas Tavlarios, Aegean’s President, commented, “In the first quarter, we recorded record sales volumes despite low commodity prices, including fuel oil at its lowest point since 2003, which impacted gross spread. Despite this economic headwind, our unique business model enabled Aegean to capitalize on growth opportunities across our global platform serving 33 markets with more than 60 ports. Consistent with our goal of opportunistically entering new markets, we launched bunkering operations in Algoa Bay, a market with strong growth potential. We are pleased with the progress to date in this and remain committed to providing customers with a faster, more efficient and affordable alternative in the region.”

Mr. Tavlarios continued, “To ensure Aegean is well positioned for continued success, we have addressed and are implementing a number of initiatives to drive efficiency and reduce costs to strengthen the Company. These initiatives include maximizing efficient use of our diversified platform, reducing expenses across the organization, and optimizing and investing resources in the most attractive markets. As we move forward, we are confident that these decisive actions will ensure Aegean is positioned for future growth and value creation for shareholders.”

Generating Solid Financial Results

Revenue – The Company reported total revenue of $752.9 million for Q1 2016, a decrease of 25.8% compared to the same period in 2015 due to the drop in oil prices. Voyage and other revenues decreased to $18.1 million or by 12.1% compared to the same period in 2015.
Gross profit – Gross Profit, which equals total revenue less directly attributable cost of revenue increased by 0.4% to $80.9 million in the first quarter of 2016 compared to $80.6 million in the same period in 2015.
Operating Expense – The Company reported operating expense of $62.6 million, an increase of $2.0 million or 3.3% compared to the same period in prior year.
Operating Income – Operating income for Q1 was $18.3 million, a decrease of 9.0% compared to the same period in prior year.
Net Income – The Company achieved net income attributable to Aegean shareholders for the three months ended March 31, 2016 of $11.8 million, or $0.24 basic and diluted earnings per share a decrease of $0.4 million or 3.3% compared to the same period in 2015.

Operational Metrics

Sales Volume – For the three months ended March 31, 2016, the Company reported record marine fuel sales volumes of 4,212,636 metric tons, an increase of 44.5% compared with the same period in 2015. Marine fuel sales volume excluding bulk trading was 4,120,114 metric tons, an increase of 41.3% compared with the same period in 2015.
EBITDA Per Metric Ton – For the three months ended March 31, 2016, the Company reported EBITDA per metric ton sold of $6.44. EBITDA per metric ton in the prior year period was $9.58 per metric ton.
Gross Spread Per Metric Ton – For the three months ended March 31, 2016, the Company reported gross spread per metric ton on an aggregate basis of $17.6 per metric ton. Gross spread per metric ton in the prior year period was $24.1 per metric ton.

Liquidity and Capital Resources

Net cash provided by operating activities was $10.9 million for the three months ended March 31, 2016. Net income as adjusted for non-cash items (as defined in Note 9 below) was $50.9 million for the period.
Net cash used in investing activities was $8.8 million for the three months ended March 31, 2016, primarily due to the acquisition of a second hand vessel.
Net cash used in financing activities was $6.0 million for the three months ended March 31, 2016, mainly due to the repayment of short-term debt.
As of March 31, 2016, the Company had cash and cash equivalents of $135.9 million and working capital of $361.2 million. Non-cash working capital, or working capital excluding cash and debt, was $489.5 million.
As of March 31, 2016, the Company had $957.7 million undrawn amounts under its working capital facilities and $135.9 million of unrestricted cash and cash equivalents to finance working capital requirements.
The weighted average basic and diluted shares outstanding for the three months ended March 31, 2016 was 47,545,710. The weighted average basic and diluted shares outstanding for the three months ended March 31, 2015 was 46,840,532 respectively.

Spyros Gianniotis, Aegean’s Chief Financial Officer, stated, “We are proud to have achieved our 21st consecutive quarter of profitability. We continue to take decisive actions to maintain our strong financial position and significant liquidity in the current challenging environment. Aegean has continued to perform in a variety of market conditions and has executed a plan to increase earnings per share of more than 57% on an adjusted basis over the last four years. We have a track record of maintaining a strong balance sheet, responsibly managing our debt and successfully and quickly de-levering. We are confident the financial and operational actions we are taking will help enable Aegean to continue enhancing value for our shareholders in the near- and long-term.”

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