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WFS records ‘better than expected performance’ in marine segment

26 Oct 2018

New York-listed global transportation fuels distributor World Fuel Services (WFS) posted profit in the third quarter (Q3) of 2018, compared to losses during the similar quarter last year, it says.

The firm recorded net profit of USD $38.2 million in Q3 2018, against net loss of USD $38.5 million in Q3 2017.

Revenue was USD $10.4 billion in Q3 2018, higher than revenue of USD $8.5 billion during the similar period last year.

“Our third quarter results were highlighted by record profitability in our aviation segment as well as better than expected performance in our marine segment,” stated Michael J. Kasbar, chairman and chief executive officer of World Fuel Services Corporation.

“We continue to focus on operating efficiencies, portfolio refinement and organic growth initiatives, which has contributed to improved operating performance in 2018 and should position us well for growth in 2019 and beyond.”

Specifically, the company’s marine segment generated revenue of USD $2.5 billion in Q3 2018, higher than USD $2.1 billion in Q3 2017.

“Volume in our marine segment for the third quarter was 6 million metric tons down approximately 850,000 metric tons or 13% year-over-year principally due to discontinuing certain low margin activities during 2018,” said Ira Birns, Executive Vice President and Chief Financial Officer at WFS.

“Our marine segment generated third quarter gross profit of $43 million, that's an increase of $13 million or 41% year-over-year representing the highest level of marine gross profit in a single quarter since 2015.

“The significant year-over-year gross profit increase was principally related to stronger margins driven by the sharp rise in bunker fuel prices and an increasingly constrained credit environment which further enhances the value of our business model. Additionally, we benefited from certain higher margin seasonal business during the third quarter.”

Volume wise, the company sold a total of 5.97 million metric tonnes (mt) of marine fuels in Q3 2018, compared to 6.82 million mt in Q3 2017.

“Looking ahead to the fourth quarter, we expect marine results to decline driven principally by the drop off in seasonal activity. Therefore, we anticipate our marine results in the fourth quarter that would be in line with, with somewhat better than our second quarter results,” he adds.

“In closing, our business performed very well in the third quarter. Highlighted by record profitability in our aviation segment and better than expected results in our marine segment.”

Related: WFS Q2 bunker sales volume 13% down on year
Related: WFS posts Q1 net profit on increase in oil prices, offset by lower volume
Related: WFS posts net loss of $142.0 million in 2017

Photo credit: World Fuel Services
Published: 26 October, 2018

 

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