Hit by Oil Prices, Aegean Posts Q3 Loss of USD 3.8 Million, to Consolidate Long-Term Businesses

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Aegean Marine Petroleum Network announced financial and operating results for the third quarter of 2017, on Wednesday. The Greece-based company reported a loss of USD 3.8 million in its third quarter. In the final minutes of trading on Wednesday, the company’s shares hit USD 3.40. A year ago, they were trading at USD 8.75.

The company said that it had a loss of 10 cents per share and posted revenue of USD 1.34 billion in the period, an increase of 18.0 per cent compared to the same period in 2016, primarily due to the spurt in oil prices.

Aegean recorded sales volumes of 4.14 metric tons (a decrease of 2.8 per cent compared to the same period in 2016), gross profit of USD 67.9 million and operating income of USD 6.7 million. The company generated EBITDA of USD 15.2 million during this period.

During the quarter, Aegean implemented strategic initiatives to consolidate business for the long term. The company withdrew from the loss-generating physical supply business in Singapore and rationalised fleet operations in Gibraltar, leading to better utilisation and lower cost. However, given the size of the market Aegean will continue to maintain a trading presence in Singapore and keep a finger on the pulse of the trade.

Aegean’s president, Jonathan McIlroy said that the company experienced an extremely challenging market. Despite modest improvement in some segments of the shipping industry, the oil markets and the marine fuel sector remain under great pressure, with intense competition leading to margin deterioration.

“We are rationalising our US West Coast storage operations, moving to smaller facilities where capacity better corresponds to actual utilisation levels. This will enable us to reduce costs and improve profit margins,” McIlroy added.

As of September 30, 2017, the Company had cash and cash equivalents of USD 74.8 million and working capital of USD 360.2 million. Non-cash working capital, or working capital excluding cash and debt, was USD 731.8 million.

Aegean said that it has now achieved cost savings of USD 24 million, exceeding its previously stated goal of realising annualised cost savings of USD 2 million, and has now upped the target to USD 30 million. The supplier also expects to add at least one new market presence in the first half of 2018.

“We believe that as we continue to rationalise our global business in this competitive market, our balance sheet strength and geographic mix will differentiate Aegean from competitors that do not have the benefit of our broad network and solid capitalisation,” Aegean’s CFO, Spyros Gianniotis said.

Sea News, November 16