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Fri 28 Jul 2017, 00:02 GMT

World Fuel Services' marine profit dips as revenue rises despite lower sales volume


Q2 and H1 marine gross profit fall 17% and 15.5% respectively.



The marine division of World Fuel Services Corporation (WFS) managed to post an increase in revenue for both the second quarter (Q2) and first half (H1) of 2017 despite recording lower sales volume in both periods, yet saw gross profit dip.

In Q2, WFS sold 6.8 million tonnes, which was a decline of 1.4 million tonnes, or 17.7 percent (calculated using sales in gallons), from last year's figure of 8.2 million tonnes. H1 sales fell by 14.4 percent to 13.6 million tonnes, down from 15.9 million tonnes in 2016.

Despite the decrease in sales volume, Q2 marine revenue rose $173.4 million, or 9.4 percent, to $2,013.8 million, whilst H1 revenue was up $990.4 million, or 31.8 percent, to $4,107.3 million.

Marine gross profit in Q2, meanwhile, was lower by $6.8 million, or 17 percent, at $32.9 million. H1 gross profit fell $12.2 million, or 15.5 percent, to $66.6 million.

Overall results

In its overall results, World Fuel Services Corporation posted a Q2 net income of $30.0 million - the same as the figure achieved during the corresponding period last year. H1 net income decreased by $20.2 million, or 24.8 percent, to $61.4 million.

Adjusted Q2 net income was $34.2 million compared to $34.8 million in the prior-year quarter.

Non-GAAP Q2 net income excluding share-based compensation, amortization of acquired intangible assets and other one-time items was $45.1 million compared to $44.0 million in 2016.

Commenting on the results, Michael J. Kasbar, Chairman and Chief Executive Officer, said: "While certain headwinds in our marine and land businesses persist, we remain focused on achieving operational efficiencies which should serve us well as we execute on our long-term growth strategy."

"We generated $156 million of operating cash flow in the first half of 2017, reduced our debt by approximately $120 million and repurchased $32 million of our common stock, further strengthening our balance sheet and driving incremental shareholder value," remarked Ira Birns, Executive Vice President and Chief Financial Officer. "However, due to a weaker outlook for certain parts of our business, we are lowering our 2017 full year guidance range to $2.10 to $2.40 adjusted diluted earnings per share," Birns added.


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