Thu 11 Nov 2010, 06:14 GMT

Aegean reports 67% drop in Q3 earnings


Net income falls despite 82% rise in revenue as the cost of marine petroleum products sold nearly doubles.



Aegean Marine Petroleum Network Inc. has announced that net income for the third quarter of 2010 fell by $9.5 million, or 67 percent, year-on-year. The lower-than-expected earnings were achieved despite an 82 percent rise in revenue as the cost of marine petroleum products sold jumped 87 percent to $1.275 billion.

The New York-listed bunker supplier posted a net income of $4.6 million, or $0.10 per share, compared with $14.1 million, or $0.33 per share, during the corresponding period in 2009.

Net income adjusted for one-time expenses, including $1.2 million in restructuring charges for the company's Vancouver operations as well as $1.9 million in unrealized foreign exchange losses related to Aegean Marine's Verbeke Bunkering subsidiary, was $7.7 million, or $0.16 per share.

Total revenues for the third quarter increased by 82 percent to $1,340.0 million compared to $736.1 million for the same period in 2009. Sales of marine petroleum products increased by 82.2 percent to $1,333.4 million compared to $731.8 million for the year-earlier period.

Net revenue, which equals total revenue less cost of goods sold and cargo transportation expenses, increased by 15.9 percent to $60.5 million compared to $52.2 million during the same 3-month period in 2009.

The cost of marine petroleum products sold rose by $592.9 million, or 87 percent, to 1,275 million, up from 682 million during the third quarter of 2009.

The volume of marine fuel sold increased by 75.6 percent to 2,871,711 metric tonnes compared to 1,635,473 metric tonnes in the year-earlier period, as sales volumes increased across major markets.

Operating income for the third quarter decreased by $7.4 million, or 43 percent, to $9.8 million compared to $17.2 million the previous year.

Operating expenses, excluding the cost of fuel and cargo transportation costs, increased by $15.7 million, or 45 percent, to $50.7 million for the three months ended September 30, 2010, up from $35.0 million in 2009.

Commenting on the results, E. Nikolas Tavlarios, President commented, "During the third quarter, Aegean Marine increased sales volumes by more than 75% compared to the year-earlier period. However our results for the quarter reflect a change in the competitive landscape across our geographical portfolio, particularly in our two largest markets, which adversely affected gross spread. The industry experienced an increase in the supply of marine fuel together with a change in buying patterns by shipowners, who used increased downtime to fill their marine fuel requirements through smaller purchases in a higher number of ports. Additionally, our performance for the quarter was impacted by one-time restructuring charges for our Vancouver market as well as unrealized foreign exchange loss related to our Verbeke Bunkering subsidiary."

Mr. Tavlarios added, "With a comprehensive marine fuel solution from procurement to delivery, combined with considerable access to capital, Aegean Marine's future prospects remain strong. Our unique business model creates attractive leverage opportunities and we expect to increase our long-term earning potential as we continue to expand our global full-service platform and meet the strong demand for our vertically integrated services."

First Nine Months

For the first nine months of 2010, Aegean posted a $4.1 million, or 11.8 percent, drop in net income to $30.7 million, or $0.66 per share, compared to a net income of $34.8 million, or $0.82 per share, for the year-earlier period.

Total revenues for period increased by $1,875.8 million, or 114 percent, to $3,519.9 million compared to $1,644.1 million in 2009. Sales of marine petroleum products rose to $3,505.0 million compared to $1,631.0 million last year.

Net revenue increased 32.0 percent, or $44.6 million, to $184.0 million in the first nine months of this year, compared to $139.4 million in 2009.

The volume of marine fuel sold increased by 66.9 percent to 7,417,270 metric tonnes compared to 4,444,447 metric tonnes during the corresponding period last year.

Operating income for the nine months ended September 30, 2010 rose to $46.4 million, up from $43.1 million in 2009.


Container ship near a port. Ammonia emerges as most feasible alternative fuel for deep-sea shipping in 2050 emissions study  

Research combining expert survey and technical analysis ranks ammonia ahead of hydrogen and methanol.

Cargo vessel at sea. EMSA study examines biodiesel blend spill response as shipping adopts alternative fuels  

Research addresses knowledge gaps on biodiesel-conventional fuel blends as marine pollutants and response measures.

BIMCO ETS BARECON clause 2026 graphic. BIMCO adopts ETS clause for bareboat charters, delays biofuel provision  

BIMCO’s Documentary Committee has approved an emissions trading compliance clause while requesting further work on a biofuel charter provision.

SALEFORM 2025 standard form graphic. BIMCO and Norwegian Shipbrokers’ Association launch SALEFORM 2025 ship sale contract  

Updated agreement addresses banking changes, compliance requirements and environmental regulations affecting vessel transactions.

Everllence H2 test engine. Everllence develops hydrogen test bench for marine engines  

German engine maker upgrades Augsburg facility under HydroPoLEn project backed by federal maritime research funding.

CMA CGM Osmium vessel. CMA CGM names 13,000-teu methanol-fuelled containership in South Korea  

CMA CGM Osmium to operate on Asia–Mexico service as part of the carrier’s decarbonisation strategy.

NorthStandard logo. NorthStandard publishes biofuel guide as marine insurance claims emerge  

White paper addresses quality issues and compliance requirements as biofuel testing volumes surge twelvefold.

Clean Maritime Fuels Platform (CMFP) logo. Maritime fuel platform calls for EU shipping ETS revenues to fund clean fuel deployment  

Clean Maritime Fuels Platform urges earmarking of national emissions trading revenues for renewable fuel infrastructure.

Seatransport 73m SLV Lloyd’s Register grants approval for hybrid nuclear power design for amphibious vessels  

Classification society approves Seatransport’s concept integrating micro modular reactors with diesel-electric systems.

Everllence ME-LGIE engine. Everllence and Vale partner on ethanol-powered marine engine development  

Brazilian mining company to develop dual-fuel ethanol engines based on ME-LGI platform.





 Recommended