Aegean Marine sees Q2 profit almost double; record adjusted EBITDA results of $37.9 million

Aegean

Aegean Marine Petroleum Network Inc. announced financial and operating results for the second quarter ended June 30, 2016.

Second Quarter Financial Highlights
Compared to prior year period:
Increased sales volumes by 29.9% to 4,092,789 metric tons.
Increased gross profit by 19.0% to $93.4 million compared to prior year.
Increased operating income by 95.3% to $28.9 million.
Increased operating income adjusted for a loss on sale of non-core vessels by 111.5% to $31.3 million.
Recorded GAAP net income attributable to Aegean shareholders of $13.5 million or $0.27 basic and diluted earnings per share.
Net income adjusted for a loss on sale of non-core vessels was $16.0 million or $0.32 basic and diluted earnings per share.
Generated record adjusted EBITDA of $37.9 million.
Sold two non-core vessels, enabling $5 million in debt pay down, which is expected to result in operating cost reductions of approximately $6.4 million on an annual basis.

Second Quarter Operational Highlights
Ramped-up operations in Algoa Bay, South Africa, further expanding global platform.
Further optimized operations through the sale of two non-core vessels.
Strategically relocated certain vessels from lower-activity markets to higher-growth regions.

E. Nikolas Tavlarios, Aegean’s President, commented, “We generated strong operational and financial results in the quarter and are pleased with the momentum we have going into the second half of the year. During the second quarter we increased sales volumes and improved performance in many key markets, including our new operations in South Africa and Brazil. Our top- and bottom-line results benefitted from our initiatives to strengthen our global platform and optimize our geographic footprint. Our decisions to sell non-core vessels will result in cost reductions and align with our focus on strategically allocating our resources to swiftly respond to fluctuations in demand and capitalize on opportunities in markets where we see the most potential.”

Mr. Tavlarios concluded, “We are seeing strong indications of continued growth for the full year 2016 and remain confident in our ability to drive profitability and increase volumes across our platform to deliver enhanced shareholder value.”

Generating Solid Financial Results
Revenue – The Company reported total revenue of $987.6 million for the second quarter of 2016, a decrease of 18.2% compared to the same period in 2015, primarily due to the drop in oil prices. Voyage and other revenues decreased to $19.8 million or by 8.8% compared to the same period in 2015.
Gross Profit – Gross Profit, which equals total revenue less directly attributable cost of revenue increased by 19.0% to $93.4 million in the second quarter of 2016 compared to $78.5 million in the same period in 2015.

Operating Expense – The Company reported operating expense of $64.5 million for the second quarter of 2016, an increase of $0.8 million or 1.3% compared to the same period in prior year. Adjusting for the sale of non-core assets, operating expense was $62.1 million, a decrease of 2.5% compared to the same period in the prior year.

Operating Income – Operating income for the second quarter of 2016 adjusted for the sale of non-core assets was $31.3 million, an increase of 111.5% compared to the same period in the prior year.

Net Income – Net income attributable to Aegean shareholders adjusted for the sale of non-core vessels was $16.0 million, or $0.32 basic and diluted earnings per share, an increase of $8.9 million or 125.4% compared to the same period in 2015.

Operational Metrics
Sales Volume – For the three months ended June 30, 2016, the Company reported marine fuel sales volumes of 4,092,789 metric tons, an increase of 29.9% compared to the same period in 2015.
Adjusted EBITDA Per Metric Ton of Marine Fuel Sold – For the three months ended June 30, 2016, the Company reported adjusted EBITDA per metric ton of marine fuel sold of $9.26. Adjusted EBITDA per metric ton of marine fuel sold in the prior year period was $7.63 per metric ton.

Gross Spread Per Metric Ton of Marine Fuel Sold – For the three months ended June 30, 2016, the Company reported gross spread per metric ton of marine fuel sold on an aggregate basis of $20.9. Gross spread per metric ton of marine fuel sold in the prior year period was $22.5.

Liquidity and Capital Resources
Net cash used in operating activities was $60.4 million for the three months ended June 30, 2016. Net income as adjusted for non-cash items (as defined in Note 9 below) was $37.1 million for the same period.
Net cash provided by investing activities was $7.9 million for the three months ended June 30, 2016, primarily due to the sale of two non-core vessels.
Net cash provided by financing activities was $44.5 million for the three months ended June 30, 2016, mainly due to the drawdown of short-term debt.
As of June 30, 2016, the Company had cash and cash equivalents of $127.8 million and working capital of $387.6 million. Non-cash working capital, or working capital excluding cash and debt, was $581.6 million.
As of June 30, 2016, the Company had $867.8 million of undrawn amounts under its working capital facilities and $127.8 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 June 30, 2016, was 48,117,508. The weighted average basic and diluted shares outstanding for the three months ended June 30, 2015 was 47,366,134.

Spyros Gianniotis, Aegean’s Chief Financial Officer, stated, “During the quarter, we achieved strong adjusted EBITDA per metric ton of marine fuel sold of $9.26, a 43.8% increase quarter over quarter. While we achieved strong results across the board, we believe adjusted EBITDA per metric ton of marine fuel sold best reflects our operational improvements. In the second quarter we also reported a 29.9% year over year increase in volumes and improved performance without increase in operating expenses. Financial flexibility and a strong balance sheet remain important differentiators for our business. The two vessel sales during the quarter enabled us to pay down $5 million of debt and is expected to help eliminate approximately $6.4 million in operating costs on an annual basis. We have and intend to continue to actively manage our business while de-levering and strengthening our balance sheet to drive results for all Aegean shareholders.”

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