Business

WFS Q2 2020 results report operating segments ‘negatively impacted’ by Covid-19

Despite volumes across the board generally being negatively impacted, the marine segment generated gross profit of USD 37.2 million, an increase of 2% on year, it said.

Published

3 years ago

August 3, 2020

Admin

New York-listed oil and bunker trading firm World Fuel Services (WFS) on Thursday (30 July) said volumes across all of its operating segments were “negatively impacted” by the global shutdown due to the COVID-19 pandemic in its Q2 2020 results.

“The resilience of our diversified business model produced a respectable result for the quarter,” said Michael J. Kasbar, chairman and chief executive officer of WFS.

In Q1 2020, the company reported its marine segment generating the highest level of quarterly gross profit in more than five years.

However, it also expected “marine gross profit to be more meaningfully impacted by both the coronavirus situation as well as substantially lower fuel prices, particularly low-sulphur fuel oil.”

Despite volumes across the board in Q2 2020 generally being negatively impacted, the marine segment generated gross profit of USD37.2 million, an increase of 2% year-over-year, it said.

This is principally related to improved performance in the company’s core resale business, offset by significantly lower volume due to a decline in activity in connection with the pandemic.

The marine segment posted 4 million metric tonnes (mt) of bunker fuel sales in Q2 2020, a 21.5% decline compared to 5.1 MT sold in a similar quarter last year.

The reported highlights of the Q2 2020 results are:

Total gross profit of USD 213.9 million, down 20% year-over-year
GAAP net loss of USD 10.2 million, or USD0.16 per diluted share
Adjusted net income of USD 8.1 million, or USD 0.13 per diluted share
Adjusted EBITDA of USD 57.1 million

“Our continued focus on cost and liquidity management further strengthened our balance sheet during this extraordinary time,” said Ira M. Birns, executive vice president and chief financial officer.

“We generated cash flows from operations of USD 236 million during the quarter and the expected proceeds from the announced sale of the Multi Service payment solutions business will provide additional capital to strategically invest in our core business portfolio.”

While the COVID-19 pandemic had a limited adverse effect on our results of operations and financial condition for the first quarter of 2020, the company said it has since seen a sharp decline in demand and related sales as large sectors of the global economy have been adversely impacted by the crisis.

WFS noted that it expects these negative impacts to continue through the third quarter as the recent increases in COVID-19 cases have further delayed the reopening of various economies around the world.

In addition to the actions it took during the first quarter in light of the unprecedented effects of the COVID-19 pandemic on the global economy, during the second quarter of 2020, WFS said it took additional steps and expanded the restructuring of its operations to include the rationalization of its global office footprint, including the transition of select offices to smaller or more cost-effective locations.

“While the ultimate duration and impact of the pandemic on our business and our customers' operations remains unclear, we will continue to seek additional opportunities to further enhance our operating efficiencies and reduce costs throughout the current crisis and eventual recovery,” concluded WFS.

Photo credit: World Fuel Services
Published: 3 August, 2020

Vessel Arrest

Malaysia: MMEA detains tanker for illegal anchoring in East Johor waters

Panama-registered vessel was operated by 17 crew members, aged between 21 to 58 years, from Pakistan, India and Bangladesh.

Published

22 hours ago

November 29, 2023

Admin

Malaysia: MMEA detains tanker for illegal anchoring in East Johor waters

The Malaysian Maritime Enforcement Agency (MMEA) on Tuesday (28 November) said a Panama-registered tanker has been detained for illegally anchoring in East Johor waters on 27 November.

MMEA Tanjung Sedili Zone acting director Maritime Cmdr Mohd Najib Sam said the tanker was detained by a patrol boat at 11am at 15.8 nautical miles northeast of Tanjung Penawar.

The captain of the vessel failed to produce any documents that permission had been obtained to anchor in Malaysian waters.

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The vessel was operated by 17 crew members, aged between 21 to 58 years, from Pakistan, India and Bangladesh.

The case will be investigated under Section 491B(1)(L) of the Merchant Shipping Ordinance 1952 for anchoring without permission. If found guilty, individuals may be fined not exceeding MYR 100,000 or face an imprisonment term of not more than two years, or both.

Manifold Times previously reported law firm Oon & Bazul LLP sharing on steps shipowners should keep in mind before anchoring and conducting STS operations in Malaysian waters to avoid detention.

Photo credit: Malaysian Maritime Enforcement Agency
Published: 29 November, 2023

Alternative Fuels

DNV paper outlines bunkering of alternative marine fuels for boxships

Third edition of its paper series focuses on LNG, methanol and ammonia as alternative bunker fuel options for containerships; explores bunkering aspects for LNG and methanol.

Published

22 hours ago

November 29, 2023

Admin

DNV paper outlines bunkering of alternative marine fuels for boxships

Classification society DNV recently released the third edition of its paper series Alternative fuels for containerships, focused on LNG, methanol and ammonia as alternative bunker fuel options for containerships.

In its updated paper series, DNV examined the different alternative marine fuel options and provided an overview of the most important technical and commercial considerations for the containership sector.

It explored the bunkering technology for LNG, bunkering infrastructure for methanol, and availability and infrastructure of ammonia.

Building on the foundation laid in the second edition, which focused on the most important aspects of methanol as a fuel, this latest third edition delves deeper – exploring the technical intricacies and commercial considerations associated with adopting methanol as an alternative fuel for containerships.

Furthermore, it provides an overview of crucial aspects related to ammonia and discusses its potential as an alternative fuel for containerships.

Amongst others, the new edition of the paper looks at the following aspects:

Technical design considerations for methanol
Commercial implications of adopting methanol as an alternative fuel
Ammonia's potential as an alternative fuel
Availability, infrastructure and ship fuel technology for ammonia
Major updates based on the latest IMO GHG strategy decisions at the MEPC 80 meeting

Note: The third edition of DNV’s full paper titled Alternative Fuels for Containerships can be found here.

Photo credit: DNV
Published: 29 November, 2023

Alternative Fuels

EDF, LR and Arup launch tool scoring ports’ potential to produce and bunker electrofuels

Tool is also applied to three different port scenarios, including ports exploring fuel production and bunkering, ports exploring fuel exports, and ports exploring fuel imports and bunkering.

Published

22 hours ago

November 29, 2023

Admin

EDF, LR and Arup launch tool scoring ports’ potential to produce and bunker electrofuels

Lloyd’s Register (LR) Maritime Decarbonisation Hub and Environmental Defense Fund (EDF), in collaboration with Arup, on Tuesday (28 November) introduced the Sustainable First Movers Initiative Identification Tool, a system to help shipping stakeholders align investment decisions that support the maritime energy transition away from fossil fuels.

The tool, which is presented in a preliminary findings report – The Potential of Ports in Developing Sustainable First Movers Initiatives – scores a port’s potential to produce and bunker electrofuels while delivering local environmental and community benefits in alignment with the global temperature target of 1.5 degrees Celsius set by the Paris Agreement.

“Ports can play an important role in kickstarting shipping’s decarbonisation process even before global policies are established,” said Marie Cabbia Hubatova, Director, Global Shipping at Environmental Defense Fund.

“By considering the impact sustainable first mover initiatives can have on port-side communities, climate, environment and economies, resources can be better directed to locations where these initiatives will make the biggest difference.”

With close to two billion people living near coastal zones globally, the role of, and impacts on local port communities must be intentionally considered as the sector decarbonises globally. Ports can play a crucial role in ensuring shipping decarbonisation efforts are done in a way that has positive impacts on port communities.

The preliminary phase of the Sustainable First Movers Initiative Identification Tool analyses 108 ports in the Indo-Pacific region according to five criteria including land suitability, air quality, renewable energy surplus, economic resilience and ship traffic.

It is also applied to three different port scenarios, including ports exploring fuel production and bunkering, ports exploring fuel exports, and ports exploring fuel imports and bunkering. The combined criteria and scenario evaluation determines which ports have the greatest potential (high potential) for sustainable first mover initiatives to lead to significant emissions reductions and positive impacts in nearby communities, such as improved air quality and economic resilience.

“The transition to clean energy supply for shipping can be achieved only if stakeholders act together. Identifying potential port locations is the first step in this process,” said Dr Carlo Raucci, Consultant at Lloyd’s Register Maritime Decarbonisation Hub. “This approach sets the base for a regional sustainable transition that considers the impacts on port-side communities and the need to avoid regions in the Global South lagging behind.”

Regions in the Global South are fundamental in driving the decarbonisation of shipping. To make this transition effective, the rate at which different countries adopt and scale up electrofuels must be proportional to the difference in capital resources globally to avoid additional costs being passed on to local communities. Sustainable first mover initiatives can play an important role in making this happen by ensuring the sector’s decarbonisation is inclusive of all regions and by engaging all shipping stakeholders, including port-side communities.

“There’s a huge opportunity for early adopter shipping decarbonisation initiatives to unlock benefits for people and planet – shaping the way for a more equitable transition in the 2030s,” said Mark Button, Associate, Arup. “Our collective approach shows that taking a holistic view of shipping traffic, fuel production potential and port communities could help prioritise action at ports with the greatest near-term potential.”

The tool can be customised according to stakeholders’ needs and goals and is dependent on scenario desirability. The next phase of this work will include the selection and detailed assessment of 10 ports to help better understand local needs and maximise the value offered by sustainable first mover initiatives.

LR and EDF carried out a joint study on ammonia as shipping fuel, and LR and Arup have collaborated on The Resilience Shift study focused on fuel demand for early adopters in green corridors, ports, and energy systems, amongst many other projects.

Photo credit: Lloyd’s Register
Published: 29 November, 2023