Image: Aegean Marine Petroleum

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Aegean Marine Petroleum Network Inc. (AMPNI) provided further insight into how it intends to improve sales margins and profitability during the management's quarterly analysis of the company's performance on Thursday.

The bunker firm's gross spread per metric tonne of marine fuel sold has plummeted in recent years, with the company posting a 2017 figure of $15.8 - down 19 percent on the previous year.

A summary of the company's annual gross spread over the last five years has been provided below.

Year	Gross spread ($/mt)
2017	15.8
2016	19.5
2015	22.0
2014	26.5
2013	25.4

In an effort to raise profitability, the company has focused on repositioning its portfolio towards higher margin business, and in the fourth quarter (Q4) managed to raise the gross spread by 6.2 percent (to $15.5) on the previous quarter's $14.6 result - the lowest since AMPNI was founded in 2005; however, the figure was still 26.5 percent below the $21.2 posted in Q4 2016.

NYSE-listed Aegean is now actively seeking to replace Singapore and Fujairah volumes with sales in more profitable locations. President Jonathan McIlroy said that a key element would be the expected expansion in volumes in the Amsterdam-Rotterdam-Antwerp (ARA) region in 2018, where sales are currently said to be more than 400,000 tonnes per month.

Also part of the strategy is an escalation of business in Rostock, Kiel and Hamburg. Additionally, the plan is to reduce delivered volumes in low-margin areas such as Los Angeles, which would be replaced with sales elsewhere in the existing supply network, or in newly added physical locations, such as Savannah.

Another tactic to improve the gross spread, according to McIlroy, will be to "cherry-pick" volumes in Los Angeles as the scale of the company's business there is reduced.

"We have analyzed the business in-depth and built a strategy for the [Los Angeles] station that focuses on targeting higher-margin business," McIlroy explained.

McIlroy also confirmed on Thursday that the company's move to "a new and smaller storage facility that better corresponds to our business needs" in Los Angeles is now complete.

Furthermore, McIlroy stated that Aegean had successfully renegotiated contracts for core supply locations in late 2017 for the whole of 2018, with some of those contracts extended into 2019. They were said to include "top liner and car carrier customers for the ARA region".

The bunker seller is also in the process of renegotiating other contracts in the ARA region and on the US East Coast, McIlroy noted.