New York-listed World Fuel Services (WFS) expects its marine fuels business to produce better returns in the long term due to current reduction activities.
“As we look to the first quarter [of 2018] for marine, we expect gross profit to be relatively flat, but sequential marine result should improve driven principally by the benefit of additional cost reduction activities,” says Ira Birns, Executive Vice President and Chief Financial Officer of WFS, in a recent financial earnings conference call.
WFS’ marine segment generated fourth quarter gross profit of $29 million in 2017, down $6 million or 16% year-over-year; volume in the similar segment was 6.1 million metric tonnes, down approximately 1.5 million metric tons or 20% year-over-year.
“The largest drivers of the volume reduction relate to our operations in the Asia-Pac region and our decision to exit certain markets we have seen continued market pressure and weakness as well as our continuous efforts to reduce activity in regions where we have not been achieving satisfactory returns on capital,” Birns adds.
Michael Kasbar, Chairman and Chief Executive Officer of WFS, believes the company’s marine segment will produce better results in the longer term.
“Our right sized marine business should yield better returns and it's poised in the longer term to capitalise on the continuing need in the market for a comprehensive service and distribution partner,” he notes.
“We are well positioned to provide any solution for 2020 when low sulphur regulations commence.”
Moving ahead, Kasbar indicates that WFS may be exploring to enter the physical bunker supply business.
“I don't know if we have more of the markets to exist. We are being mindful of returns,” he said when responding to a query of marine volumes in the first quarter of 2018.
“So there has been some changes that is not a surprise to folks that have been following the marine business. So, we are looking as I said to model or physical business.”
Manifold Times earlier reported WFS posting net loss of $142 million in 2017 due to “challenging market conditions” in the marine and land segments.
Related: WFS posts net loss of $142.0 million in 2017
Published: 26 February, 2018
Secures long term tankage agreement with local oil storage company for both fuel oil and gasoil.
USTC said Bunker Holding has achieved massive growth over the last years, through substantial investment in culture to attract and retain talent.
Product now available at Kandla and Kochi ports; deliveries at other locations to start from mid-November.
HSFO supply remains tight in Gibraltar Strait ports; ARA gasoil stocks gain weight while fuel oil is drawn; bunker fuel availability improves in Durban.
Ammonia is considered one of the most promising alternative bunker fuels, supporting the marine energy transition away from carbon-based power sources.
T&E has called on the EU to raise this mandate, otherwise known as a sub-quota to at least 6% in 2035; also called for removal of exemption for companies with three ships or less.
‘Bunker barges operate in very local areas so these vessels call at port very often which means it will be a good fit for women with families,’ states Elpi Petraki, President of WISTA International.
“Our Singapore branch is under preparation and is expected to start business at the republic before June 2023,” Managing Director Darcy Wong tells bunkering publication Manifold Times in an interview.
Development to supply B35 biodiesel blend officially takes effect on 1 February; local bunker suppliers will be able to deliver updated spec within March onwards, once current stocks of B30 avails run out.
VPS, Global Centre for Maritime Decarbonisation, Wilhelmsen Ship Management, and INTERTANKO executives offered a multitude of perspectives to 73 attendees during the VPS Biofuels Seminar, reports Manifold Times.
Headway will launch a new fuel supply system suitable for alternative bunker fuels such as hydrogen and ammonia; to focus on procurement and construction of carbon capture systems in 2023 following R&D.
Competition for FAME from aviation and road transportation sectors have resulted in some shipowners resorting to adopt more readily available CNSL blends as biofuel for vessels, explains Steve Bee.
