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.


Oriental Aquamarine vessel. HMM deploys Korea's first MR tanker with wing sail technology  

Oriental Aquamarine equipped with wind-assisted propulsion system expected to cut fuel consumption by up to 20%.

BC Ferries vessel render. ABB to supply hybrid-electric propulsion for BC Ferries' four new vessels  

Technology will enable ferries to run on biofuel or renewable diesel with battery storage.

Alternative marine fuels port graphic. LNG-fuelled boxships sustain alternative fuel orderbook share despite market slowdown  

Alternative fuels maintained 38% of gross tonnage orders in 2025, driven by container segment.

Conceptual diagram of the MOL–ITOCHU strategic alliance. MOL and ITOCHU sign MoU for cross-industry environmental attribute certificate partnership  

Japanese shipping and trading firms to promote EACs for reducing Scope 3 emissions in transport.

CPN as China's No. 1 marine biofuel supplier in 2025 graphic. Chimbusco Pan Nation delivers 170,000 tonnes of marine biofuel in China in 2025  

Supplier says volumes quadrupled year on year, with a 6,300-tonne B24 operation completed during the period.

V.Group and Njord logo side by side. V.Group acquires Njord to expand decarbonisation services for shipowners  

Maritime services provider buys Maersk Tankers-founded green technology business to offer integrated fuel-efficiency solutions.

Container vessel manoeuvring in port. Has Zhoushan just become the world's third-largest bunker port?  

With 2025 sales of 8.03m tonnes for the Chinese port, Q4 data for Antwerp-Bruges will decide which location takes third place.

Monjasa Oil & Shipping Trainee (MOST) trainees. Monjasa opens applications for global trainee programme  

Marine fuel supplier seeks candidates for MOST scheme spanning offices from Singapore to New York.

Singapore's first fully electric harbour tug. Singapore's first fully electric tug completes commissioning ahead of April deployment  

PaxOcean and ABB’s 50-tonne bollard-pull vessel represents an early step in harbour craft electrification.

Fuel for thought: Hydrogen report cover. Lloyd's Register report examines hydrogen's potential and challenges for decarbonisation  

Classification society highlights fuel's promise alongside safety, infrastructure, and cost barriers limiting maritime adoption.





 Recommended