Aegean Marine Petroleum Network Inc. ANW announced financial and operating results for the first quarter ended March 31, 2009.
First Quarter and Year-to-Date Highlights
• Increased sales volumes by 23.6% to 1,310,037 metric tons in Q1 2009, compared to 1,060,134 metric tons for Q1 2008.
• Expanded net revenues to $40.0 million.
• Recorded operating income of $8.3 million.
• Reported net income of $4.4 million, or $0.10 basic and diluted earnings per share.
• Continued expanding global presence and infrastructure:
o Expanded Greek operations to the market of Patras.
o Acquired or took delivery of five double-hull bunkering tankers, including two newbuildings.
• Secured a new senior secured revolving credit facility for a period of two years.
• Entered into strategic alliance with Gulf Oil for the marketing and distribution of marine lubricants.
The company recorded net income of $4.4m, or $0.10 basic and diluted earnings per share, for the three months ended March 31, 2009. For purposes of comparison, the Company reported net income of $7.5m, or $0.18 basic and diluted earnings per share, for the three months ended March 31, 2008. The weighted average basic and diluted shares outstanding for the three months ended March 31, 2009 were 42,553,550 and 42,553,550, respectively. The weighted average basic and diluted shares outstanding for the three months ended March 31, 2008 were 42,471,325 and 42,622,326, respectively.
Total revenues for the three months ended March 31, 2009, decreased by 31.3% to $365.4m compared to $532m for the same period in 2008. For the three months ended March 31, 2009, sales of marine petroleum products decreased by 31.9% to $361m compared to $530.4m for the year-earlier period. Net revenue, which equals total revenue less cost of goods sold and cargo transportation expenses, increased 20.1% to $40m in the first quarter of 2009 compared to $33.3m in the year-earlier period. Results for the first quarter of 2009 were primarily driven by a 12.7% increase in the gross spread on marine petroleum products to $35.6m compared to $31.6m for the same period in 2008.
For the three months ended March 31, 2009, the volume of marine fuel sold increased by 23.6% to 1,310,037 metric tons compared to 1,060,134 metric tons in the year-earlier period, as sales volumes improved in Greece and Singapore. Furthermore, results for the first quarter of 2009 included sales volumes from Aegean's new markets in the U.K. (April 2008) and North America (July 2008). During the three months ended March 31, 2009, the gross spread per metric ton of marine fuel sold decreased to $26.8 per metric ton, compared to $29.7 per metric ton in the year-earlier period. Operating income for the first quarter of 2009 was $8.3m compared to $8.5m for the same period in 2008.
Operating expenses, excluding the cost of fuel and cargo transportation costs (both of which are included in the calculation of gross spread on marine petroleum products explained above), increased to $31.7m for the three months ended March 31, 2009 compared to $24.8m for the same period in 2008. This increase was principally due to operating an expanded logistics infrastructure during the first quarter of 2009 compared to the first quarter of 2008.
E. Nikolas Tavlarios, President, commented, "During the first quarter, sales volumes were affected by our previously announced focus on actively managing counterparty risk. Sales volumes were also affected by the redeployment of bunkering tankers and inclement weather conditions in certain ports. Management's precautionary and proactive measures have served to protect Aegean during the most challenging economic environment since the Great Depression and enabled the Company to successfully avoid any customer defaults. Aegean's strong financial position, brand name, newbuild program, and proven business model for the physical supply of marine fuel remain as the fundamentals for our future growth. "
"During the quarter, we continued to take advantage of our strong capital position and expanded our global marine fuel platform. Specifically, we strengthened our presence in the Mediterranean by commencing operations in Patras, the second largest port in Greece. We also remain on track to launch operations in Tangiers, Morocco and Trinidad and Tobago during the current second quarter, increasing Aegean's reach to 14 markets worldwide. Complementing this notable growth, we took delivery of two double-hull bunkering tanker newbuildings and acquired three additional double-hull bunkering tankers during the first quarter and year-to-date. By entering new strategic markets and expanding our modern bunkering delivery fleet as we have consistently done in the past, we expect to increase our long-term earnings potential and strengthen Aegean's industry leadership."
As of March 31, 2009, the company had cash and cash equivalents of $25.5m and working capital of $139.3m. Non-cash working capital, or working capital excluding cash and debt, was $126.3m as of March 31, 2009. Net cash used in operating activities was $16.3m for the three months ended March 31, 2009. Net income, as adjusted for non-cash items, was $10.1m for the period.Net cash used in investing activities was $33.9m for the three months ended March 31, 2009, mainly due to additional payments of $34.6m under the Company's construction contracts with the shipyards. Net cash provided by financing activities was $28.8m for the three months ended March 31, 2009, primarily driven by an increase in long-term debt financing relating to newbuild vessels.
As of March 31, 2009, the Company had approximately $162.3m in available liquidity to finance working capital requirements, which includes unrestricted cash and cash equivalents and available undrawn amounts under the Company's short-term working capital facilities. Furthermore, as of March 31, 2009, the Company had funds of approximately $96m available under its secured term loans to finance the construction of its new double-hull bunkering tankers.
Spyros Gianniotis, Chief Financial Officer, stated, "Our operating results for the first quarter of 2009 were led by improved sales volumes in Singapore and Greece. While we believe markets have begun to stabilize, we will maintain a conservative approach in the extension of credit during this period of economic uncertainty. Based on management's prudent decision to tighten credit controls, we have not experienced any customer delinquencies."
"Aegean's strong working capital base positions the Company well to further expand its global marine fuel platform and increase future sales volumes. We have significantly funded the equity portion of our 19 remaining double-hull bunkering tanker newbuildings, which are scheduled to be delivered by the end of 2010, and have ample liquidity under our senior secured credit facilities to meet our debt requirements. As we continue to increase our delivery capacity, we will maintain our disciplined approach in pursuing additional consolidation opportunities that drive long-term shareholder value."