Aegean Marine tops 3Q revenue forecasts

Aegean

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

Third Quarter Financial Highlights

Compared to prior year period:
Increased sales volumes to 4,258,954 metric tons.
Reported gross profit of $88.4 million.
Reported operating income of $22.5 million.
Increased operating income adjusted for a loss on sale of non-core vessels and the accelerated vesting of the shares of Aegean’s founder (“Accelerated Shares”) was $29.6 million.
Recorded GAAP net income attributable to Aegean shareholders of $10.6 million or $0.22 basic and diluted earnings per share.
Net income adjusted for a loss on sale of non-core vessels and the Accelerated Shares was $17.7 million or $0.36 basic and diluted earnings per share. Pro-forma adjusted EPS, assuming the repurchase of shares occurred at the beginning of period, was $0.45.
Generated adjusted EBITDA of $37.7 million.
Sold two non-core vessels, which is expected to result in operating cost reductions of more than $3.0 million on an annual basis.

Third Quarter Operational Highlights
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 delivered another quarter of solid results against a backdrop of slowness in the container segment and volatile commodity markets. Despite these headwinds, we continue to achieve profitability and strong volumes with our fourth consecutive quarter of selling more than 4 million metric tons of bunker fuel. Our diversified platform, recent expansion in new attractive markets and our back-to-back trading businesses contributed to our growth during the quarter.”

Mr. Tavlarios concluded, “Aegean has transformed into a diversified business with operations around the world and we look forward to additional opportunities ahead. We are proud of what we have created and our ability to serve more customers across our global footprint as a leader in the physical supply and marketing of marine fuel. We remain committed to executing our strategic initiatives and leveraging our scale to drive growth and shareholder value.”

Generating Solid Financial Results

Revenue – The Company reported total revenue of $1.1 billion for the third quarter of 2016, an increase of 5.4% compared to the same period in 2015, primarily due to the moderate increase in oil prices. Voyage and other revenues were, $21.2 million, consistent with the same period in 2015.

Gross Profit – Gross Profit, which equals total revenue less directly attributable cost of revenue increased by 4.7% to $88.4 million in the third quarter of 2016 compared to $84.4 million in the same period in 2015.
Operating Expense – The Company reported operating expense of $65.9 million for the third quarter of 2016, a decrease of $0.8 million or 1.2% compared to the same period in prior year. Adjusting for the sale of non-core assets and the Accelerated Shares, operating expense was $58.8 million, a decrease of 2.6% compared to the same period in the prior year.

Operating Income – Operating income for the third quarter of 2016 adjusted for the sale of non-core assets and the Accelerated Shares was $29.6 million, an increase of 28.7% 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 and the Accelerated Shares was $17.7 million, or $0.36 per basic and diluted share, an increase of $5.6 million or 46.3% compared to the same period in 2015. Adjusted pro-forma EPS using the reduced quarter end share count as opposed to a weighted average, was $0.45.

Operational Metrics

Sales Volume – For the three months ended September 30, 2016, the Company reported marine fuel sales volumes of 4,258,954 metric tons, an increase of 25.8% compared to the same period in 2015.
Adjusted EBITDA Per Metric Ton of Marine Fuel Sold – For the three months ended September 30, 2016, the Company reported adjusted EBITDA per metric ton of marine fuel sold of $8.84. Adjusted EBITDA per metric ton of marine fuel sold in the prior year period was $9.29 per metric ton.
Gross Spread Per Metric Ton of Marine Fuel Sold – For the three months ended September 30, 2016, the Company reported gross spread per metric ton of marine fuel sold on an aggregate basis of $18.6. Gross spread per metric ton of marine fuel sold in the prior year period was $21.6.

Liquidity and Capital Resources

Net cash provided by operating activities was $34.7 million for the three months ended September 30, 2016. Net income as adjusted for non-cash items (as defined in Note 9 below) was $31.2 million for the same period.
Net cash provided by investing activities was $1.1 million for the three months ended September 30, 2016, primarily due to the sale of two non-core vessels.
Net cash used in financing activities was $105.8 million for the three months ended September 30, 2016, primarily due to the repurchase of our common stock.
The weighted average basic and diluted shares outstanding for the three months ended September 30, 2016, was 46,464,248. The weighted average basic and diluted shares outstanding for the three months ended September 30, 2015 was 47,434,953.

Spyros Gianniotis, Aegean’s Chief Financial Officer, stated, “In addition to our strong operational performance, we are taking action to enhance efficiency through the sale of 5 non-core vessels year to date, including two in the third quarter, which will reduce operating costs by $9.5 million annually. We will continue to evaluate our markets and redeploy capital to opportunities we believe will generate the best return. During the quarter we strengthened our financial flexibility with the renewal of our $1 billion credit facility on improved terms.”

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