Aegean Marine reports strong results; record sales volumes

Aegean Marine

Aegean Marine Petroleum Network Inc. announced financial and operating results for the third quarter ended September 30, 2015.

Third Quarter Highlights
Recorded sales volumes of 3,386,511 metric tons.
Recorded gross profit of $84.4 million.
Recorded operating income of $17.7 million which includes an impairment charge of $5.3 million related to the closure of Aegean’s Portland, UK business.
Operating income adjusted for the impairment charge was $23.0 million.
Recorded net income attributable to Aegean shareholders of $6.8 million or $0.14 basic and diluted earnings per share.
Net income adjusted for the impairment charge related to the closure of Aegean’s Portland, U.K. business was $12.1 million or $0.25 basic and diluted earnings per share.
Recorded EBITDA of $26.2 million.

EBITDA adjusted for the impairment charge related to the closure of Aegean’s Portland, U.K. business was $31.5 million.

E. Nikolas Tavlarios, Aegean’s President, commented, “Aegean Marine’s market leadership position and strong financial performance provide a solid foundation for continued growth and diversification. We are excited about the new growth opportunities and revenue streams we are pursuing, and we continue to shift our mix to higher return products such as lower sulfur fuels and blended finished products. Our Fujairah Oil Terminal continues to perform well, operating at excellent efficiency levels and is currently at about 86% capacity. During the quarter we expanded our customer offerings to include cargo sales, a new area of investment for Aegean Marine that is expected to provide us with an additional low cost revenue stream.”

Revenue – The Company reported total revenue of $1.1 billion for the third quarter of 2015, a decrease of 40.2%, compared to the same period in 2014 due to the drop in oil prices. Voyage and other revenues increased to $21.2 million or 14.8% compared to the same period in 2014.

Gross profit – Gross Profit, which equals total revenue less directly attributable cost of revenue increased by 2.2% to $84.4 million in the third quarter of 2015 compared with $82.6 million in the same period in 2014.

Operating Expense – The Company reported operating expense of $66.7 million, a decrease of $11.0 million or 14.2% from the prior year period. When adjusted for the impairment charge related to the closure of Aegean’s Portland, U.K. business in the current quarter and a loss on sale of assets in the prior year period the Company reported a decrease in operating expense of $2.5 million or 3.9%.

Operating Income – Operating income for the period ended September 30, 2015 was $17.7 million, an increase of 261.2% over the prior year period. Operating income adjusted for the impairment charge related to the closure of Aegean’s Portland, U.K. business in the current quarter and a loss on sale of assets in the prior year period showed an increase of $4.3 million or 23.0%.

Net Income – The Company achieved net income attributable to Aegean shareholders for the three months ended September 30, 2015 of $6.8 million, or $0.14 basic and diluted earnings per share. Net income adjusted for the impairment charge related to the closure of Aegean’s Portland, U.K. business was $12.1 million or $0.25 basic and diluted earnings per share. For the three months ended September 30, 2014, the Company recorded net income attributable to Aegean shareholders adjusted for a loss on sale of assets of $9.4 million, or $0.20 basic and diluted earnings per share.

Operational Metrics
Sales Volume – For the three months ended September 30, 2015 the Company reported record marine fuel sales volumes of 3,386,511 metric tons an increase of 14.5% compared with the same period in 2014.

Gross Spread Per Metric Ton – For the three months ended September 30, 2015 the Company reported gross spread per metric ton on an aggregate basis of $21.6 per metric ton. Gross spread per metric ton on Aegean’s physical marine fuel supply business was approximately $23.0 per metric ton.

Adjusted EBITDA Per Metric Ton – For the three months ended September 30, 2015 the Company reported adjusted EBITDA per metric ton sold of $9.30. Adjusted EBITDA per metric ton in the prior year period was $7.70 per metric ton.

Liquidity and Capital Resources
Net cash provided by operating activities was $127.5 million for the three months ended September 30, 2015. Net income, as adjusted for non-cash items (as defined in Note 9 below) was $19.8 million for the period.

Net cash used in investing activities was $0.5million for the three months ended September 30, 2015, primarily due to the purchase of fixed assets.
Net cash used in financing activities was $54.2 million for the three months ended September 30, 2015, derived mainly from the repayment of short-term debt.

As of September 30, 2015, the Company had cash and cash equivalents of $115.4 million and working capital of $281.2 million. Non-cash working capital, or working capital excluding cash and debt, was $457.7 million.
As of September 30, 2015, the Company had $910.4 million undrawn amounts under its working capital facilities and $115.4 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 September 30, 2015 was 47,434,953. The weighted average basic and diluted shares outstanding for the three months ended September 30, 2014 were 47,434,953 respectively.
Spyros Gianniotis, Aegean’s Chief Financial Officer, stated, “We delivered strong financial results in the quarter as a result of our differentiated and diverse strategy, financial flexibility and solid balance sheet that can support profitability over the long-term. We are introducing a new metric this quarter, EBITDA per ton, which we believe more accurately reflects Aegean’s performance and the impact our diversified revenue stream is having on the bottom line. Looking ahead, we remain focused on advancing our position in the fuel supply industry and enhancing our global footprint. We are confident in our ability to create value for shareholders, continue successfully executing our strategy and drive profitability.”

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