New York-listed bunkering firm Aegean Marine Petroleum Network has forecast a $28.2 million net loss for its fourth quarter of 2017 (Q4 2017) results.
It noted Q4 2017 results being impacted by $14.5 million in non-recurring charges; $4.5 million was spent on legal, tax and advisory fees while $10.0 million was related to tax and accounting changes, currency translation, non-cash severance, write-offs from the company’s closure in Singapore and the loss on the sale of a vessel.
A further $12 million of losses was recorded as a result of the Aegean’s first in, first out (FIFO) reporting method of inventory cost that created a “mismatch” when compared to the mark-to-market of the company’s respective hedges at December 31, 2017.
However, the above $12 million loss was recovered in January 2018 when inventory was sold at market prices with hedges being closed at market.
According to Aegean, the company has taken steps to cut costs and offset the competitive operating environment in 2017.
Among measures were its exit of the physical supply business in Singapore; recalibration of West Coast U.S. storage footprint; reduction of volumes and increased focus on more profitable businesses in the Fujairah market; and the introduction of a dynamic chartering program for its vessel fleet.
“Despite what has continued to be a challenging period in our core business, I am proud of the definitive action our management team has taken to offset market weakness,” says Jonathan McIlroy, President of Aegean.
“Our expected fourth quarter headline results do not tell the full story of the cost cutting and bold steps we have taken—such as ceasing our physical supply business in Singapore during the quarter.
“While business was slower to come back in the wake of third quarter’s severe hurricane season and refinery outages in Mexico, our core business showed signs of modest improvement from third quarter’s results.
“2018 is likely to be another tough year for our core business, but Aegean is amidst a transformation that we firmly believe will unlock significant value for all shareholders over time.”
Photo credit: Aegean Marine Petroleum Network
Publication date: 22 February, 2018
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