Second Quarter Sales Volumes Increase 21.6%
PIRAEUS, Greece, Aug. 12 /PRNewswire-FirstCall/ -- Aegean Marine Petroleum Network Inc. (NYSE:ANW) today announced financial and operating results for the second quarter ended June 30, 2009.
Second Quarter and Year-to-Date Highlights -- Increased sales volumes by 21.6% to 1,498,937 metric tons in Q2 2009,
compared to 1,232,438 metric tons for Q2 2008. -- Expanded net revenues to $47.2 million. -- Recorded operating income of $17.6 million, including a non-recurring
gain of $4.2 million on the sale of vessels. Recurring operating
income was $13.4 million. -- Reported net income of $16.3 million, or $0.38 basic and diluted
earnings per share. Net income, excluding the gain on sale of
vessels, was $12.1 million, or $0.29 basic and $0.28 diluted earnings
per share. -- Continued expanding global presence and infrastructure:
-- Initiated operations in Trinidad & Tobago.
-- Acquired three double-hull bunkering vessels.
The Company recorded net income of $16.3 million, or $0.38 basic and diluted earnings per share, for the three months ended June 30, 2009. Net income, adjusted for a $4.2 million gain from sale of vessels, was $12.1 million, or $0.29 basic and $0.28 diluted earnings per share. For purposes of comparison, the Company reported net income of $9.9 million, or $0.23 basic and diluted earnings per share, for the three months ended June 30, 2008. The weighted average basic and diluted shares outstanding for the three months ended June 30, 2009 were 42,576,830 and 42,728,588, respectively. The weighted average basic and diluted shares outstanding for the three months ended June 30, 2008 were 42,495,020 and 42,644,708, respectively.
Total revenues for the three months ended June 30, 2009, decreased by 26.8% to $542.6 million compared to $741.0 million for the same period in 2008. For the three months ended June 30, 2009, sales of marine petroleum products decreased by 27.1% to $538.2 million compared to $738.6 million for the year-earlier period. Net revenue, which equals total revenue less cost of goods sold and cargo transportation expenses, increased 13.2% to $47.2 million in the second quarter of 2009 compared to $41.7 million in the year-earlier period.
Results for the second quarter of 2009 were primarily driven by a 9.2% increase in the gross spread on marine petroleum products to $42.9 million compared to $39.3 million for the same period in 2008. For the three months ended June 30, 2009, the volume of marine fuel sold increased by 21.6% to 1,498,937 metric tons compared to 1,232,438 metric tons in the year-earlier period, as sales volumes improved in Gibraltar, the U.A.E., and Singapore. Furthermore, results for the second quarter of 2009 included sales volumes from Aegean's new markets in the North America (July 2008) and Trinidad and Tobago (June 2009). During the three months ended June 30, 2009, the gross spread per metric ton of marine fuel sold decreased to $28.0 per metric ton, compared to $31.7 per metric ton in the year-earlier period.
Recurring operating income for the second quarter of 2009 was $13.4 million, excluding a $4.2 million non-recurring gain on sale of vessels, compared to $12.4 million for the same period in 2008. Operating expenses, excluding the cost of fuel and cargo transportation costs (both of which are included in the calculation of gross spread on marine petroleum products explained above), increased to $33.8 million for the three months ended June 30, 2009 compared to $29.3 million for the same period in 2008. This increase was principally due to the expanded logistics infrastructure during the second quarter of 2009 compared to the second quarter of 2008.
E. Nikolas Tavlarios, President, commented, "Our strong results for the second quarter demonstrate management's continued success in building a leading brand for the worldwide supply of marine fuel as we remain focused on increasing Aegean's global market share. During the quarter, sales volumes increased 21.6% compared to the year-earlier period despite the challenging economic environment. While we believe market conditions have seen an improvement, we continue to actively manage counterparty risk to best serve shareholders." Mr. Tavlarios added, "We continued to strengthen our industry leadership during the quarter. Specifically, we drew upon our considerable financial strength to grow our high-quality logistics infrastructure with the acquisition of three double-hull bunkering vessels. We also launched operations in Trinidad and Tobago and expect to enter Tangiers, Morocco in the current quarter, increasing our presence to 14 markets worldwide. By once again expanding our global marine fuel platform, we have significantly enhanced our ability to meet the demand for Aegean's integrated services and increase the Company's earnings power." For the six months ended June 30, 2009, the Company recorded net income of $20.7 million, or $0.49 basic and diluted earnings per share, compared to net income of $17.4 million, or $0.41 basic and diluted earnings per share, for the year-earlier period. The weighted average basic and diluted shares outstanding for the six month period ended June 30, 2009 were 42,565,254 and 42,565,254, respectively. The weighted average basic and diluted shares outstanding for the six months ended June 30, 2008 were 42,483,292 and 42,629,293, respectively.
Total revenues for the six months ended June 30, 2009 decreased by 28.7% to $908.0 million compared to $1,273.0 million for the same period a year ago. For the six months ended June 30, 2009, sales of marine petroleum products decreased by 29.1% to $899.2 million compared to $1,269.0 million for the same period in 2008. Net revenues for the six months ended June 30, 2009 were $87,728.0 million as compared to $75,002.0 million in the year-earlier period.
Results for the six months ended June 30, 2009 were led by a 10.5% increase in the gross spread on marine petroleum products to $78.4 million compared to $71.0 million for the same period a year ago. For the six months ended June 30, 2009, the volume of marine fuel sold increased 22.5% to 2,808,974 metric tons compared to 2,292,572 metric tons in the year-earlier period. During the six months ended June 30, 2009, the gross spread per metric ton of marine fuel sold decreased by $3.4 to $27.4 per metric ton, compared to $30.8 per metric ton for the same period a year ago.
Operating income for the six months ended June 30, 2009 was $25.9 million compared to $20.9 million for the same period in 2008.
Liquidity and Capital Resources As of June 30, 2009, the Company had cash and cash equivalents of $27.3 million and working capital of $191.8 million. Non-cash working capital, or working capital excluding cash and debt, was $204.0 million as of June 30, 2009.
Net cash used in operating activities was $63.5 million for the three months ended June 30, 2009. Net income, as adjusted for non-cash items, was $15.8 million for the period.
Net cash used in investing activities was $1.3 million for the three months ended June 30, 2009, which was composed of $35.4 million relating to advances paid for both vessels under construction and second-hand acquisitions. These payments were mostly offset by proceeds received on the disposition of vessels amounting to $34.1 million.
Net cash provided by financing activities was $66.5 million for the three months ended June 30, 2009, driven by both an increase in working capital financing and an increase in long-term debt financing relating to newbuild vessels.
As of June 30, 2009, the Company had approximately $44.8 million in available liquidity to finance working capital requirements, which includes unrestricted cash and cash equivalents and available undrawn amounts under the Company's short-term working capital facilities. Furthermore, as of June 30, 2009, the Company had funds of approximately $83.6 million available under its secured term loans to finance the construction of its new double-hull bunkering tankers.
Spyros Gianniotis, Chief Financial Officer, stated, "Our operating results for the second quarter of 2009 were led by improved sales volumes in Singapore, the U.A.E., and Gibraltar as well as contributions from new markets. During the quarter, management continued to closely monitor the extension of credit to our customers while maintaining our commitment to growth. Aegean boasts a strong balance sheet, including $290 million in senior secured credit facilities, and is well positioned to take advantage of the positive industry fundamentals and drive future sales volumes." Summary Consolidated Financial and Other Data (Unaudited) For the Three Months For the Six Months
Ended June 30, Ended June 30,
--------------------- --------------------
2008 2009 2008 2009
---- ---- ---- ---- (in thousands of U.S. dollars, unless otherwise stated)
Income Statement
Data:
Sales of marine
petroleum products $738,629 $538,208 $1,269,001 $899,166
Voyage and other
revenues 2,390 4,355 4,047 8,819
----- ----- ----- -----
Total revenues 741,019 542,563 1,273,048 907,985
Cost of marine
petroleum products
sold 696,152 494,334 1,192,281 818,214
Salaries, wages and
related costs 10,368 12,016 18,790 22,493
Depreciation and
amortization 3,805 5,204 7,492 10,077
Gain on sale of vessel - (4,185) - (4,185)
All other operating
expenses 18,260 17,581 33,565 34,970
------ ------ ------ ------
Operating income 12,434 17,613 20,920 25,916
Net financing cost 2,596 2,608 4,829 4,458
FX losses (gains), net (53) (1,545) (1,304) 216
Income taxes 4 228 7 523
= === = ===
Net income $9,887 $16,322 $17,388 $20,719
====== ======= ======= ======= Basic earnings per
share (U.S. dollars) $0.23 $0.38 $0.41 $0.49
Diluted earnings per
share (U.S. dollars) $0.23 $0.38 $0.41 $0.49 Other Financial Data:
Gross spread on marine
petroleum products(1) $39,329 $42,855 $70,955 $78,409
Gross spread on
lubricants(1) 244 816 437 1,315
Gross spread on marine
fuel(1) 39,085 42,039 70,518 77,094
Gross spread per
metric ton of marine
fuel sold (U.S. dollars) (1) 31.7 28.0 30.8 27.4
Net cash provided by
(used in) operating
activities (18,791) (63,466) 21,489 (79,777)
Net cash used in
investing activities 40,156 1,267 52,107 35,211
Net cash provided by
financing activities $64,369 $66,542 $44,707 $95,377 Sales Volume Data
(Metric Tons): (2)
Total sales volumes 1,232,438 1,498,937 2,292,572 2,808,974
--------- --------- --------- --------- Other Operating Data:
Number of bunkering
tankers, end of
period(3) 22.0 34.0 22.0 34.0
Average number of
bunkering
tankers(3)(4) 21.2 32.0 20.3 31.4
Special Purpose
Vessels, end of
period number(5) - 1.0 - 1.0
Number of owned
storage facilities,
end of period(6) 3.0 4.0 3.0 4.0 Summary Consolidated Financial and Other Data (Unaudited) As of As of
December 31, June 30,
2008 2009
------------ ------------- (in thousands of U.S. dollars,
unless otherwise stated)
Balance Sheet Data:
Cash and cash equivalents 46,927 27,316
Gross trade receivables 132,589 232,584
Allowance for doubtful accounts (1,323) (1,282)
Inventories 55,330 103,828
Current assets 251,387 384,754
Total assets 641,907 814,847
Trade payables 90,279 140,450
Current liabilities (including current
portion of long-term debt) 202,022 192,954
Total debt 253,621 350,871
Total liabilities 356,904 508,575
Total stockholder's equity 285,003 306,272 Working Capital Data:
Working capital(7) 49,365 191,800
Working capital excluding cash and debt(7) 100,158 203,960
1. Gross spread on marine petroleum products represents the margin the Company generates on sales of marine fuel and lubricants. Gross spread on marine fuel represents the margin that the Company generates on sales of various classifications of marine fuel oil ("MFO") or marine gas oil ("MGO"). Gross spread on lubricants represents the margin that the Company generates on sales of lubricants. The Company calculates the above-mentioned gross spreads by subtracting from the sales of the respective marine petroleum product the cost of the respective marine petroleum product sold and cargo transportation costs. For arrangements in which the Company physically supplies the respective marine petroleum product using its bunkering tankers, costs of the respective marine petroleum products sold represents amounts paid by the Company for the respective marine petroleum product sold in the relevant reporting period. For arrangements in which the respective marine petroleum product is purchased from the Company's related company, Aegean Oil S.A., or Aegean Oil, cost of the respective marine petroleum products sold represents the total amount paid by the Company to the physical supplier for the respective marine petroleum product and its delivery to the customer. For arrangements in which the Company purchases cargos of marine fuel for its floating storage facilities, transportation costs may be included in the purchase price of marine fuels from the supplier or may be incurred separately from a transportation provider.
Gross spread per metric ton of marine fuel sold represents the margin the Company generates per metric ton of marine fuel sold. The Company calculates gross spread per metric ton of marine fuel sold by dividing the gross spread on marine fuel by the sales volume of marine fuel. Marine fuel sales do not include sales of lubricants. The following table reflects the calculation of gross spread per metric ton of marine fuel sold for the periods presented: Summary Consolidated Financial and Other Data (Unaudited) For the Three Months For the Six Months
Ended June 30, Ended June 30,
-------------------- ------------------
2008 2009 2008 2009
---- ---- ---- ----
(in thousands of U.S. dollars, unless
otherwise stated) Sales of marine petroleum
products 738,629 538,208 1,269,001 899,166
Less: Cost of marine petroleum
products sold (696,152) (494,334) (1,192,281) (818,714)
Less: Cargo transportation
costs (3,148) (1,019) (5,765) (2,043)
------ ------ ------ ------
Gross spread on marine
petroleum products 39,329 42,855 70,955 78,409
------ ------ ------ ------
Less: Gross spread on
lubricants (244) (816) (437) (1,315)
---- ---- ---- ------
Gross spread on marine fuel 39,085 42,039 70,518 77,094
====== ====== ====== ====== Sales volume of marine fuel
(metric tons) 1,232,438 1,498,937 2,292,572 2,808,974 Gross spread per metric ton
of marine fuel sold
(U.S. dollars) 31.7 28.0 30.8 27.4
---- ---- ---- ---- The amount that the Company has to pay for marine petroleum products to fulfill a customer order has been the primary variable in determining the prices quoted to customers. Therefore, the Company evaluates gross spread per metric ton of marine fuel sold in pricing individual transactions and in long-term strategic pricing decisions. The Company actively monitors its pricing and sourcing strategies in order to optimize its gross spread on marine petroleum products. The Company believes that this measure is important to investors because it is an effective intermediate performance measure of the strength of the Company's operations.
Gross spread on marine petroleum products, including gross spread on marine fuel and gross spread on lubricants, and gross spread per metric ton of marine fuel sold should not be considered as alternatives to operating income, net income or other GAAP measures and may not be comparable to similarly titled measures of other companies. These measures do not reflect certain direct or indirect costs of delivering marine petroleum products to the Company's customers (such as crew salaries, vessel depreciation, storage costs, other vessel operating expenses or overhead costs) or other costs of doing business.
For all periods presented, the Company purchased marine petroleum products in Greece from its related company, Aegean Oil, which is a physical supplier in Greece. The cost of these marine petroleum products was contractually calculated based on Aegean Oil's actual cost of these products plus a margin.
2. Sales volume of marine fuel is the volume of sales of various classifications of MFO and MGO for the relevant period and is denominated in metric tons. The Company does not use the sales volume of lubricants as an indicator.
The Company's markets include its physical supply operations in the United Arab Emirates, Gibraltar, Jamaica, Singapore, Northern Europe, Ghana, Vancouver, Portland (U.K.), Trinidad and Tobago (Southern Caribbean), and Greece, where the Company conducts operations through its related company, Aegean Oil. Aegean also expects to commence operations in Tangiers (Morocco) in the second-half of 2009.
3. Bunkering fleet comprises both bunkering vessels and barges.
4. Figure represents average bunkering fleet number for the relevant period, as measured by the sum of the number of days each bunkering tanker or barge was used as part of the fleet during the period divided by the cumulative number of calendar days in the period multiplied by the number of bunkering tankers at the end of the period. This figure does not take into account non-operating days due to either scheduled or unscheduled maintenance.
5. Special Purpose Vessels consists of the Orion, a 550 dwt tanker which is based in our U.K. market.
6. The Company operates two Panamax tankers, the Ouranos and the Fos, one Aframax tanker , the Leader, and one general purpose tanker, the Aegean IX, as floating storage facilities in the United Arab Emirates, Ghana, Gibraltar, and Jamaica, respectively.
The ownership of floating storage facilities allows the Company to mitigate its risk of supply shortages. Generally, storage costs are included in the price of refined marine fuel quoted by local suppliers. The Company expects that the ownership of floating storage facilities will allow it to convert the variable costs of this storage fee mark-up per metric ton quoted by suppliers into fixed costs of operating its owned storage facilities, thus enabling the Company to spread larger sales volumes over a fixed cost base and to decrease its refined fuel costs.
7. Working capital is defined as current assets minus current liabilities. Working capital excluding cash and debt is defined as current assets minus cash and cash equivalents minus restricted cash minus current liabilities plus short-term borrowings plus current portion of long-term debt.
Second Quarter 2009 Dividend Announcement On August 12, 2009, the Company's Board of Directors declared a second quarter 2009 dividend of $0.01 per share payable on September 3, 2009, to shareholders of record as of August 20, 2009. The dividend amount was determined in accordance with the Company's dividend policy of paying cash dividends on a quarterly basis subject to factors including the requirements of Marshall Islands law, future earnings, capital requirements, financial condition, future prospects and such other factors as are determined by the Company's Board of Directors. The Company anticipates retaining most of its future earnings, if any, for use in operations and business expansion.
Conference Call and Webcast Information Aegean Marine Petroleum Network Inc. will conduct a conference call and simultaneous Internet webcast at 8:30 a.m. ET on Thursday, August 13, 2009, to discuss its second quarter results. Investors may access the webcast and related slide presentation, by visiting the Company's website at http://www.ampni.com/, and clicking on the webcast link. The conference call also may be accessed via telephone by dialing (877) 440-5791 (for U.S.-based callers) or (719) 325-4902 (for international callers) and enter the passcode: 2117454.
A replay of the webcast will be available soon after the completion of the call and will be accessible on http://www.ampni.com/. A telephone replay will be available through Thursday, August 27, 2009, by dialing 888-203-1112 (for U.S.-based callers) or 719-457-0820 (for international callers) and enter the passcode: 2117454.
About Aegean Marine Petroleum Network Inc.
Aegean Marine Petroleum Network Inc. is an international marine fuel logistics company that markets and physically supplies refined marine fuel and lubricants to ships in port and at sea. The Company procures product from various sources (such as refineries, oil producers, and traders) and resells it to a diverse group of customers across all major commercial shipping sectors and leading cruise lines. Currently, Aegean has a global presence in 14 markets, including Vancouver, Montreal, Mexico, Jamaica, Trinidad and Tobago, West Africa, Gibraltar, U.K., Northern Europe, Piraeus, Patras, the United Arab Emirates as well as Singapore, and plans to commence operations in Tangiers, Morocco.
Cautionary Statement Regarding Forward-Looking Statements Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.
The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words "believe," "intend," "anticipate," "estimate," "project," "forecast," "plan," "potential," "may," "should," "expect" and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management's examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.
In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include our ability to manage growth, our ability to maintain our business in light of our proposed business and location expansion, our ability to obtain double hull secondhand bunkering tankers, the outcome of legal, tax or regulatory proceedings to which we may become a party, adverse conditions in the shipping or the marine fuel supply industries, our ability to retain our key suppliers and key customers, material disruptions in the availability or supply of crude oil or refined petroleum products, changes in the market price of petroleum, including the volatility of spot pricing, increased levels of competition, compliance or lack of compliance with various environmental and other applicable laws and regulations, our ability to collect accounts receivable, changes in the political, economic or regulatory conditions in the markets in which we operate, and the world in general, our failure to hedge certain financial risks associated with our business, our ability to maintain our current tax treatments and our failure to comply with restrictions in our credit agreements and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.
A copy of the Company's interim unaudited consolidated financial statements along with this press release have been filed today with the U.S. Securities and Exchange Commission on Form 6-K and are available on the SEC's website, http://www.sec.gov/. DATASOURCE: Aegean Marine Petroleum Network Inc.
CONTACT: Aegean Marine Petroleum Network Inc., +1-212-763-5665, ; or Investor Relations: Leon Berman, Principal, The IGB Group, +1-212-477-8438 Web Site: http://www.ampni.com/
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