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WFS marine segment gross profit records 85% on year jump in Q1 2021

29 Apr 2022

Global energy management company World Fuel Services (WFS) on Thursday (28 April) recorded a 39% on year increase in net income for the first quarter (Q1) of 2022 supported by gains from its marine segment.

The company posted net income of USD 26.3 million in Q1 2022, higher than net income of USD 18.9 million seen during Q1 2021.

Revenue for its combined aviation, land and marine segments in Q1 2022 was USD 12.5 billion, a 109% jump from revenue of USD 6.0 billion in Q1 2021.

Specifically, the marine segment generated gross profit of USD 47.0 million in Q1 2022, up 85% on year from USD 25.4 million in Q1 2021.

In total, WFS sold 4.7 million metric tonnes (mt) of bunker fuel during Q1 2022, an increase of 11% on year from 4.2 million mt of marine fuels during the similar period of last year.

“Our marine business performed extremely well navigating a sharply rising bunker fuel price environment where average bunker prices increased 30% sequentially,” said Michael J. Kasbar, chairman and CEO, WFS during a recent earnings call as quoted by Seeking Alpha.

“Unlike our variation business most of our marine transactions are executed on a spot basis and we earn higher returns on the back of higher prices resulting in extraordinary performance when compared to recent periods.”

Overall, the strong result quarter was driven by increased returns in WFS’ core resale business in a tightening credit environment caused by the significantly elevated price of bunker fuel during the quarter, explains Ira Birns, EVP and CFO, WFS.

“As we look ahead to the second quarter, we expect marine gross profit to remain strong as the price of bunker fuel remains at or above first quarter averages,” she forecasts.

“If this trend continues, second quarter marine results should again be materially ahead year-over-year and relatively consistent with the results delivered in the first quarter.”

Reports of WFS previous year financial performance are as follows:

Related: WFS marine fuels segment gross profit down 34% on year to USD 100.3 million
Related: WFS Q3 2021 marine fuels segment gross profit down 32% on year to USD 21.9 million
Related: WFS net income rebounds to $17.6 million in Q2 2021; marine posts $22.7 million gross profit
Related: WFS marine segment generated gross profit of $25.4 million, down 57% on year in Q1 2021
Related: WFS 2020 marine segment gross profit down by 17% on year due to Covid-19 factors
Related: WFS marine segment gross profit down 40% on year to $32 million during Q3 2020
Related: WFS Q2 2020 results report operating segments ‘negatively impacted’ by Covid-19
Related: WFS marine segment posts highest level of quarterly gross profit in more than five years
Related: WFS marine sales volume approximately 12% down in FY 2019

 

Photo credit: World Fuel Services
Published: 29 April, 2022

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