SGX Mainboard-listed Chemoil (SGX-ST: CHEL.SI) today that its profit after tax and minority interests for the first quarter of 2009 was $8.8m, up from $2.3m in the first quarter of 2008, or an increase of 283%.
Amid the global economic slowdown, ship owners have increasingly turned to direct physical suppliers, a factor that has enabled the company to maintain profitability and increase our retail volumes by 16% to 2.17 million metric tons in 1Q2009. A decline of 23% in Chemoil’s total sales volumes in 1Q2009 to 3.76 million metric tons from 4.88 million metric tons in 1Q2008 is attributed to lower cargo and ex-wharf volumes, which was driven by prevailing market conditions.
Gross contribution per metric ton (GCMT) at $8.74 per metric ton in 1Q2009 was higher than 4Q2008 of $8.60 per metric ton, illustrating the company’s earnings performance sustainability across sequential quarters. GCMT increased significantly by 308% against GCMT of $2.14 in 1Q2008, demonstrating Chemoil's flexibility in adjusting its sales mix to concentrate on profitable segments when changing market conditions warrant it.
Chemoil’s Chairman and CEO, Mr Mike Bandy said “Chemoil has consistently delivered strong results, despite the global downturn, which has created challenging market conditions and a significant decline in global shipping which weakened demand for bunker fuel. Our 1st quarter results convey the stability of the company, and the strength of our threepronged corporate strategy to deliver consistent operational efficiencies, controlled global expansion and dynamic product offerings. Our business is supported by strong financial and risk management policies, as well as the flexibility to focus on profitable segments in response to changing markets. This allowed us to remain focused on delivering positive sustained profitability and growth for the long-term.”
The continued decline in the price of energy saw average sales values fall by 47% year-on-year to $254 per metric ton against $478 in 1Q2008, while average purchase costs declined even further by 49% to $239 per metric ton versus $471.
Commenting on the results, Mr Jerome Lorenzo, Chemoil’s Chief Financial Officer, said “Chemoil has maintained a consistent level of profitability from quarter to quarter. In addition, our strategic partnerships and the successful operations of our associates have also contributed towards Chemoil’s profitability in the first quarter of 2009. Chemoil’s financial position remains healthy with shareholders’ equity at US$291 million, including US$45 million in cash and bank balances. Our working capital for 1Q2009 remains stable at US$162 million, while our debt-equity ratios continue to remain low. These results are further testament to the strength of Chemoil’s business model and experienced management team.”