New York-listed World Fuel Services (WFS) posted increase losses in 2017 when compared to the earlier year with overall results pulled down by “challenging market conditions” in the marine and land segments.
The company recorded net loss of $142.0 million in for its financial year ended 31 December 2017, compared to net profit of $77.9 million during 2016.
Its total revenue amounted to $33.7 billion in 2017, representing a 24.7% increase from revenue of $27.0 billion in 2016.
“We generated $932 million in gross profit representing modest growth over 2016. Strength in our aviation segment was meaningfully offset by challenging market conditions in marine and parts of our land segment,” stated Michael J. Kasbar, chairman and chief executive officer of World Fuel Services Corporation.
“We are optimistic about 2018 as we have begun executing on an organizational redesign to drive greater operating efficiencies. We continue to sharpen our portfolio of business activities while executing on a solid pipeline of initiatives to accelerate organic growth across the business, with opportunity for selective strategic investments, as well.”
WFS recorded a non-cash impairment charge of $91.9 million in the fourth quarter (Q4) of 2017 primarily related to its marine segment as a result of growing weakness in maritime markets over the last year, along with a further decline in demand for price risk management products and its decision to exit the marine business in certain international markets.
Further, the company recorded a restructuring charge of $59.6 million in Q4 2017 relating to the exit of two specific business activities.
WFS’ marine segment generated revenue of $8.2 billion in 2017, a 14.1% rise from revenue of $7.2 billion in 2016. Gross profit in the segment was $126.0 million during 2017, 15.7% lower than gross profit of $149.5 million in 2016.
Income from WFS’ marine operations was loss of $57.8 million in 2017, compared to profit of $30.2 million in 2016.
The company supplied 26.5 million metric tonnes (mt) of marine fuel in 2017, 15.3% down from volume of 31.4 million mt in 2016.
“We are committed to restructuring all relevant parts of the company, in terms of size and organizational design, to maximize our market competitiveness and operational agility,” said Ira M. Birns, executive vice president and chief financial officer at WFS.
“We are focused on achieving a more efficient operating model measured by the disciplined execution of fundamentals to drive improvement in long-term operational and financial performance.
“Organic and strategic growth opportunities combined with the benefit from recent restructuring activities and ongoing efforts to identify additional cost saving opportunities, should drive improved results in 2018, delivering greater value to our shareholders.”
Photo credit: World Fuel Services
Published: 23 February, 2018
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