World Kinect marine fuels segment gross profit down 54% on year to USD 74.8 million
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Global energy management company World Kinect Corporation on Thursday (26 October) recorded a 19% on year decrease in net income for the third quarter (Q3) of 2023 supported by gains from its marine segment.
The company posted net income of USD 35 million in Q3 2023, lower than net income of USD 44 million seen during Q3 2022.
Revenue for its combined aviation, land and marine segments in Q3 2023 was USD 12.3 billion, a 21.2% decrease from revenue of USD 15.6 billion in Q3 2022.
Specifically, the marine segment generated gross profit of USD 34.6 million in Q3 2023, down 54% on year from USD 74.8 million in Q3 2022.
In total, WFS sold 4.1 million metric tonnes (mt) of bunker fuel during Q3 2023, a decrease of 16% on year from 4.8 million mt of marine fuels during the similar period of last year.
“Third quarter results were lower than anticipated leading into the quarter, principally related to weakness in a few physical locations,” Birns, Executive Vice President and Chief Financial Officer, said during a recent earnings call as quoted by Seeking Alpha.
“More broadly, we experienced some modest margin pressure, but overall business activity was stable.”
“Decreased volumes and lower average fuel prices led to a marine gross profit of USD 35 million, which is down 54% from the prior year when bunker prices and market volatility were at record or near-record highs. While gross profit is down from last year’s record levels, marine working capital efficiencies remain exceptional with no real net working capital investment regardless of the market price environment.”
“For the fourth quarter, we expect a modest sequential increase in gross profit. And while marine margins should remain well ahead of historical averages, we expect marine gross profit to be down year-over-year. Again, this is due to the comparison to the fourth quarter of ‘22 when bunker prices and market volatility were considerably higher.”
Photo credit: steve pb from Pixabay
Published: 2 November, 2023
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