World Kinect marine fuels segment gross profit down 12.6% on year for Q2 2024

New York-listed global energy management company World Kinect Corporation on Thursday (25 July) recorded a 262% on year increase in net income for the second quarter (Q2) of 2024.

The company posted net income of USD 108.3 million in Q2 2024, higher than net income of USD 29.9 million seen during Q2 2023.

Revenue for its combined aviation, land and marine segments in Q2 2024 was USD 10.97 billion, a 0.09% decrease from revenue of USD 10.98 billion in Q2 2023.

Specifically, the marine segment generated gross profit of USD 36.7 million in Q2 2024, down 12.6% on year from USD 42 million in Q2 2023, principally due to reduced market volatility year-over-year.

In total, WFS sold 4.2 million metric tonnes (mt) of bunker fuel during Q2 2024, marking no changes from 4.2 million mt of marine fuels during the similar period of last year.

“Moving on to Marine; while volumes were essentially flat year-over-year, gross profit decreased about 13% driven principally by lower market volatility than experienced in the prior year period,” Ira Birns, Executive Vice President and Chief Financial Officer, said in a recent earnings call as quoted by Seeking Alpha.

“While we anticipated a sequential margin decline heading into the second quarter, the actual decline was a bit more than it had been anticipated.”

“As Mike (Michael Kasbar – Chairman and Chief Executive Officer) mentioned earlier, while Marine profitability is down from the highs of 2022, it remains an extremely efficient capital model and allows for strong returns and contributions to cash flow each quarter.”

“As we look to the third quarter, we expect Marine gross profit to be effectively flat when compared to the third quarter of 2023 as year-over-year volatility comparisons finally seem to be normalizing. To help better frame our comments, unexpected year-over-year gross profit performance, segment-by-segment we have decided to begin providing color on consolidated gross profit for the third quarter and going forward.”

Birns added the company expects consolidated gross profit to be in the range of USD 265 million to USD 274 million in the third quarter.

Related: World Kinect marine fuels segment gross profit down 6.9% on year for Q1 2024
Related: World Kinect records 33% lower FY 2023 gross profit for bunker fuels segment

Photo credit: Shaah Shahidh on Unsplash
Published: 26 July 2024