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Aegean Marine Petroleum Network Inc. Announces Third Quarter 2012 Financial Results

November 14, 2012

PIRAEUS, Greece, Nov. 14, 2012 /PRNewswire/ — Aegean Marine Petroleum Network Inc. (NYSE: ANW) (“Aegean” or the “Company”) today announced financial and operating results for the third quarter ended September 30, 2012.

Third Quarter Highlights

  • Recorded sales volumes of 2,716,388 metric tons.
  • Recorded gross profit of $74.4 million.
  • Recorded operating income of $15.1 million.
  • Recorded net income of $8.0 million attributable to AMPNI shareholders or $0.17 basic and diluted earnings per share.
  • Recorded EBITDA (as defined in Note 1) of $24.6 million.
  • Expanded global marine fuel logistics chain.
    • Commenced physical supply operations in Hong Kong.
    • Commenced utilization of Tanger Med storage facility.

The Company recorded net income attributable to AMPNI shareholders for the three months ended September 30, 2012 of $8.0 million, or $0.17 basic and diluted earnings per share. For the three months ended September 30, 2011 the Company recorded a net loss of $3.3 million, or $0.07 basic and diluted loss per share. Excluding a non-cash loss of $8.6 million from the sale of a retired floating storage vessel, net income on an adjusted basis for the third quarter of 2011 was $5.3 million, or $0.11 basic and diluted earnings per share. The weighted average basic and diluted shares outstanding for the three months ended September 30, 2012 were 45,487,844. The weighted average basic and diluted shares outstanding for the three months ended September 30, 2011 were 45,992,860.

Total revenues for the three months ended September 30, 2012, decreased 0.7% to $1,825.3 million compared to $1,838.3 million for the same period in 2011. For the three months ended September, 30 2012, sales of marine petroleum products decreased by 0.8% to $1,810.5 million compared to $1,824.9 million for the same period in 2011. Gross profit, which equals total revenue less directly attributable cost of revenue increased by 3.8% to $74.4 million in the third quarter of 2012 compared to $71.7 million in the same period in 2011.

For the three months ended September 30, 2012, the volume of marine fuel sold increased to 2,716,388 metric tons as compared to 2,715,439 metric tons in the same period in 2011.

Operating income for the third quarter 2012 increased by 190.4% to $15.1 million as compared to $5.2 million for the same period in 2011. Operating expenses excluding net book gain or loss on sale of vessels increased by $1.4 million, or 2.4%, to $59.3 million for the three months ended September 30, 2012, as compared to $57.9 million for the same period in 2011.

E. Nikolas Tavlarios, President, commented, “Our results for the third quarter reflect management’s unrelenting focus on steadily enhancing profitability under challenging market conditions as adjusted net income increased more than 50% compared to the year-earlier period. During the third quarter, we commenced physical supply operations in Hong Kong, increasing Aegean’s current global scale to 20 markets covering approximately 60 ports. We also announced plans to launch operations in Barcelona, Spain, further enhancing our ability to leverage Aegean’s high-quality logistics infrastructure. Consistent with our objective to expand Aegean’s worldwide marine fuel logistics chain, we commenced utilization of the onshore storage facility in Tanger Med during the third quarter. This new facility provides important strategic benefits that will enable Aegean to ensure the availability of product for credit quality customers, enhance its purchasing power for marine fuel and generate third-party leasing income. With an expanding global full-service platform we remain well positioned to strengthen Aegean’s global brand recognition and drive future performance.”

Liquidity and Capital Resources

As of September 30, 2012, the Company had cash and cash equivalents of $77.1 million and working capital of $74.5 million. Non-cash working capital, or working capital excluding cash and debt, was $465.8 million as of September 30, 2012.

Net cash provided by operating activities was $22.2 million for the three months ended September 30, 2012. Net income, as adjusted for non-cash items (as defined in Note 9) was $19.9 million for the period.

Net cash used in investing activities was $10.6 million for the three months ended September 30, 2012, mainly due to the advances for other fixed assets under construction.

Net cash used in financing activities was $20.7 million for the three months ended September 30, 2012, primarily driven by the pay down of net borrowings.

As of September 30, 2012, the Company had $207.1 million in available liquidity, which includes unrestricted cash and cash equivalents of $77.1 million and available undrawn amounts under the Company’s working capital facilities of $130.0 million, to finance working capital requirements.

Spyros Gianniotis, Chief Financial Officer, stated, “During the third quarter, we continued to increase fleet utilization while growing sales volumes in a number of our core markets. We also maintained our focus on executing transactions in a disciplined manner with creditworthy counterparties and improving our overall cost structure. While we continue to operate in a difficult macro environment, we believe our integrated services and financial strength bode well for management to further enhance Aegean’s long-term earnings potential as we continue to leverage our global marine fuel platform.”

    Summary Consolidated Financial and Other Data (Unaudited)

                                                              For the Three Months Ended        For the Nine Months Ended
                                                                    September 30,                    September 30,
                                                                    2011                     2012                               2011        2012
                                                                    ----                     ----                               ----        ----
                                                                (in thousands of U.S. dollars, unless otherwise stated)
    Income Statement Data:
    Revenues - third parties                                  $1,828,105               $1,814,147                         $5,181,554  $5,478,829
    Revenues - related companies                                  10,194                   11,124                             43,563      45,417
                                                                  ------                   ------                             ------      ------
    Total revenues                                             1,838,299                1,825,271                          5,225,117   5,524,246
    Cost of revenues  - third parties                          1,643,151                1,637,705                          4,710,651   4,937,503
    Cost of revenues- related companies                          123,446                  113,177                            313,616     355,943
                                                                 -------                  -------                            -------     -------
    Total cost of revenues                                     1,766,597                1,750,882                          5,024,267   5,293,446
    Gross profit                                                  71,702                   74,389                            200,850     230,800
    Operating expenses:
    Selling and distribution                                      49,425                   51,162                            143,453     159,502
    General and administrative                                     8,071                    7,774                             21,768      22,194
    Amortization of intangible assets                                360                      379                              1,069       1,130
    Loss on sale of vessels, net                                   8,631                        -                              8,682       4,218

    Operating income                                               5,215                   15,074                             25,878      43,756
    Net financing cost                                             7,493                    7,927                             20,234      24,981
    Foreign exchange (gains) losses, net                          (1,791)                  (2,103)                            (2,556)     (2,804)
    Income taxes                                                   1,884                      510                              3,303       2,783
                                                                   -----                      ---                              -----       -----
    Net (loss) income                                             (2,371)                   8,740                              4,897      18,796
                                                                  ------                    -----                              -----      ------
    Less income attributable to non-controlling
     interest                                                        962                      722                                962       2,063
                                                                     ---                      ---                                ---       -----
    Net (loss) income/ attributable to AMPNI
     shareholders                                                $(3,333)                  $8,018                             $3,935     $16,733
                                                                 =======                   ======                             ======     =======
    Basic earnings/ per share (U.S. dollars)                      $(0.07)                   $0.17                              $0.08       $0.36
    Diluted earnings/ per share (U.S. dollars)                    $(0.07)                   $0.17                              $0.08       $0.36

    EBITDA(1)                                                    $13,743                  $24,574                            $49,935     $68,114

    Other Financial Data:
    Gross spread on marine petroleum products(2)                 $63,888                  $63,933                           $186,915    $204,141
    Gross spread on lubricants(2)                                    424                      858                              1,435       2,149
    Gross spread on marine fuel(2)                                63,464                   63,075                            185,480     201,992
    Gross spread per metric ton of marine                           23.4                     23.2                               23.0        25.6
    fuel sold (U.S. dollars) (2)
    Net cash provided by (used in) operating
     activities                                                 $(32,565)                 $22,213                           $(90,319)    $79,856
    Net cash used in investing activities                         (5,594)                 (10,599)                           (27,038)    (29,238)
    Net cash provided by (used in) financing
     activities                                                   34,165                  (20,739)                            67,988     (42,008)

    Sales Volume Data (Marine Fuel Metric Tons): (3)
    Total sales volumes                                        2,715,439                2,716,388                          8,077,557   7,891,794
                                                               ---------                ---------                          ---------   ---------

    Other Operating Data:
    Number of owned bunkering tankers, end of
     period(4)                                                      58.0                     57.0                               58.0        57.0
    Average number of owned bunkering tankers(4)(5)                 56.0                     57.0                               55.5        57.5
    Special Purpose Vessels, end of period(6)                        1.0                      1.0                                1.0         1.0
    Number of owned storage facilities, end of
     period(7)                                                       8.0                      7.0                                8.0         7.0

    Summary Consolidated Financial and Other Data
     (Unaudited)

                                                            As of                     As of
                                                      December 31, 2011        September 30, 2012
                                                      -----------------        ------------------

                                                    (in thousands of U.S.
                                                           dollars,
                                                  unless otherwise stated)
    Balance Sheet
     Data:
    Cash and cash
     equivalents                                                       68,582                        77,081
    Gross trade
     receivables                                                      526,450                       554,145
    Allowance for
     doubtful
     accounts                                                          (1,354)                       (3,760)
    Inventories                                                       204,057                       199,918
    Current assets                                                    851,991                       886,105
    Total assets                                                    1,472,438                     1,509,398
    Trade payables                                                    250,810                       305,111
    Current
     liabilities
     (including
     current portion
     of long-term
     debt)                                                            650,810                       811,589
    Total debt                                                        706,916                       667,318
    Total liabilities                                                 992,896                     1,009,183
    Total
     stockholder's
     equity                                                           479,542                       500,215

    Working Capital
     Data:
    Working
     capital(8)                                                       201,181                        74,516
    Working capital
     excluding cash
     and debt(8)                                                      497,925                       465,766

    Notes:
    1.           EBITDA represents net income before
                 interest, taxes, depreciation and
                 amortization. EBITDA do not
                 represent and should not be
                 considered as an alternative to
                 net income or cash flow from
                 operations, as determined by
                 United States generally accepted
                 accounting principles, or U.S.
                 GAAP, and our calculation of
                 EBITDA may not be comparable to
                 that recorded by other companies.
                 EBITDA is included herein because
                 it is a basis upon which the
                 Company assesses its operating
                 performance and because the
                 Company believes that it presents
                 useful information to investors
                 regarding a company's ability to
                 service and/or incur
                 indebtedness. The following table
                 reconciles net income to EBITDA
                 for the periods presented:
                                For the Three
                                 Months Ended
                                September 30,  For the Nine Months Ended
                                                     September 30,
                                                     -------------
                                2011      2012     2011            2012
                                ----      ----     ----            ----

    Net (loss) income
     attributable to AMPNI
     shareholders             (3,333)    8,018    3,935          16,733

    Add: Net financing cost
     including amortization
     of financing costs        7,493     7,927   20,234          24,981
      Add: Income tax expense  1,884       510    3,303           2,783
      Add: Depreciation and
       amortization excluding
       amortization of
       financing costs         7,699     8,119   22,463          23,617

    EBITDA                    13,743    24,574   49,935          68,114
                              ------    ------   ------          ------
    2.           Gross spread on marine petroleum
                 products represents the margin the
                 Company generates on sales of
                 marine fuel and lubricants.  Gross
                 spread on marine fuel represents
                 the margin that the Company
                 generates on sales of various
                 classifications of marine fuel oil
                 ("MFO") or marine gas oil ("MGO").
                 Gross spread on lubricants
                 represents the margin that the
                 Company generates on sales of
                 lubricants. The Company calculates
                 the above-mentioned gross spreads
                 by subtracting from the sales of
                 the respective marine petroleum
                 product the cost of the respective
                 marine petroleum product sold and
                 cargo transportation costs. For
                 arrangements in which the Company
                 physically supplies the respective
                 marine petroleum product using its
                 bunkering tankers, costs of the
                 respective marine petroleum
                 products sold represents amounts
                 paid by the Company for the
                 respective marine petroleum
                 product sold in the relevant
                 reporting period. For arrangements
                 in which the respective marine
                 petroleum product is purchased
                 from the Company's related
                 company, Aegean Oil S.A., or
                 Aegean Oil, cost of the respective
                 marine petroleum products sold
                 represents the total amount paid
                 by the Company to the physical
                 supplier for the respective marine
                 petroleum product and its delivery
                 to the custom arrangements in
                 which the Company purchases cargos
                 of marine fuel for its floating
                 storage facilities, transportation
                 costs may be included in the
                 purchase price of marine fuels
                 from the supplier or may be
                 incurred separately from a
                 transportation provider.Gross
                 spread per metric ton of marine
                 fuel sold represents the margin
                 the Company generates per metric
                 ton of marine fuel sold. The
                 Company calculates gross spread
                 per metric ton of marine fuel sold
                 by dividing the gross spread on
                 marine fuel by the sales volume of
                 marine fuel. Marine fuel sales do
                 not include sales of lubricants.
                 The following table reflects the
                 calculation of gross spread per
                 metric ton of marine fuel sold for
                 the periods presented:
                For the Three Months Ended      For the Nine Months Ended
                     September 30,                  September 30,
                --------------------------
                       2011                  2012         2011                   2012
                       ----                  ----         ----                   ----

     Sales
     of
     marine
     petroleum
     products     1,824,941             1,810,525    5,196,577              5,484,406
     Less:
     Cost
     of
     marine
     petroleum
     products
     sold       (1,761,053)           (1,746,592)  (5,009,662)            (5,280,265)
     Gross
     spread
     on
     marine
     petroleum
     products        63,888                63,933      186,915                204,141
     Less:
     Gross
     spread
     on
     lubricants        (424)                 (858)      (1,435)                (2,149)
                       ----                  ----       ------                 ------
     Gross
     spread
     on
     marine
     fuel            63,464                63,075      185,480                201,992

     Sales
     volume
     of
     marine
     fuel
     (metric
     tons)        2,715,439             2,716,388    8,077,557              7,891,794
                  ---------             ---------    ---------              ---------

     Gross
     spread
     per
     metric
     ton
     of
     marine            23.4                  23.2         23.0                   25.6
     fuel
     sold
     (U.S.
     dollars)
    3.           Sales volume of marine fuel is the
                 volume of sales of various
                 classifications of MFO and MGO for
                 the relevant period and is
                 denominated in metric tons. The
                 Company does not use the sales
                 volume of lubricants as an
                 indicator.

                 The Company's markets include its
                 physical supply operations in the
                 United Arab Emirates, Gibraltar,
                 Jamaica, Singapore, Northern Europe,
                 Ghana, Vancouver, Montreal, Mexico,
                 Portland (U.K.), Trinidad and Tobago
                 (Southern Caribbean), Tangiers
                 (Morocco), Las Palmas, Tenerife,
                 Panama, Hong Kong and Greece, where
                 the Company conducts operations
                 through its related company, Aegean
                 Oil.

    4.           Bunkering fleet comprises both
                 bunkering vessels and barges.

    5.           Figure represents average bunkering
                 fleet number for the relevant
                 period, as measured by the sum of
                 the number of days each bunkering
                 tanker or barge was used as part of
                 the fleet during the period divided
                 by the cumulative number of calendar
                 days in the period multiplied by the
                 number of bunkering tankers at the
                 end of the period.   This figure
                 does not take into account non-
                 operating days due to either
                 scheduled or unscheduled
                 maintenance.

    6.           Special Purpose Vessels consists of
                 the Orion, a 550 dwt tanker which is
                 based in our Greek market.

    7.           As of September 30,2012 the Company
                 owned one Panamax tanker, the
                 Aeolos, and one Aframax tanker, the
                 Leader as floating storage
                 facilities in Gibraltar and United
                 Arab Emirates. Additionally, the
                 Company operates a barge, the
                 Mediterranean, as a floating storage
                 facility in Greece and a small
                 tanker, the Tapuit, as a floating
                 storage facility in Northern Europe.
                  The Company also has on-land
                  storage facilities in Portland, Las
                 Palmas and Panama.

                 The ownership of storage facilities
                 allows the Company to mitigate its
                 risk of supply shortages. Generally,
                 storage costs are included in the
                 price of refined marine fuel quoted
                 by local suppliers. The Company
                 expects that the ownership of
                 storage facilities will allow it to
                 convert the variable costs of this
                 storage fee mark-up per metric ton
                 quoted by suppliers into fixed costs
                 of operating its owned storage
                 facilities, thus enabling the
                 Company to spread larger sales
                 volumes over a fixed cost base and
                 to decrease its refined fuel costs.

    8.           Working capital is defined as current
                 assets minus current liabilities.
                 Working capital excluding cash and
                 debt is defined as current assets
                 minus cash and cash equivalents
                 minus restricted cash minus current
                 liabilities plus short-term
                 borrowings plus current portion of
                 long-term debt.

    9.           Net income as adjusted for non-cash
                 items, such as depreciation,
                 provision for doubtful accounts,
                 restricted stock, amortization,
                 deferred income taxes, loss on sale
                 of vessels, net, unrealized loss/
                 (gain) on derivatives and unrealized
                 foreign exchange loss/(gain), net,
                 is a quantitative standard used to
                 assist in evaluating a company's
                 ability to make quarterly cash
                 distributions. Net income as
                 adjusted for non-cash items is not
                 required by accounting principles
                 generally accepted in the United
                 States and should not be considered
                 as an alternative to net income or
                 any other indicator of the Company's
                 performance required by accounting
                 principles generally accepted in the
                 United States.

Third Quarter 2012 Dividend Announcement
On November 14, 2012, the Company’s Board of Directors declared a third quarter 2012 dividend of $0.01 per share payable on December 12, 2012 to shareholders of record as of November 28, 2012. The dividend amount was determined in accordance with the Company’s dividend policy of paying cash dividends on a quarterly basis subject to factors including the requirements of Marshall Islands law, future earnings, capital requirements, financial condition, future prospects and such other factors as are determined by the Company’s Board of Directors. The Company anticipates retaining most of its future earnings, if any, for use in operations and business expansion.

Conference Call and Webcast Information
Aegean Marine Petroleum Network Inc. will conduct a conference call and simultaneous Internet webcast on Thursday, November 15, 2012 at 8:30 a.m. Eastern Time, to discuss its third quarter results. Investors may access the webcast and related slide presentation, by visiting the Company’s website at www.ampni.com, and clicking on the webcast link. The conference call also may be accessed via telephone by dialing (866) 431-5320 (for U.S.-based callers) or (719) 325-2414 (for international callers) and enter the passcode: 8476067.

A replay of the webcast will be available soon after the completion of the call and will be accessible on www.ampni.com. A telephone replay will be available through November 29, 2012 by dialing (888) 203-1112 or (for U.S.-based callers) or (719) 457-0820 (for international callers) and enter the passcode: 8476067.

About Aegean Marine Petroleum Network Inc.
Aegean Marine Petroleum Network Inc. is an international marine fuel logistics company that markets and physically supplies refined marine fuel and lubricants to ships in port and at sea. The Company procures product from various sources (such as refineries, oil producers, and traders) and resells it to a diverse group of customers across all major commercial shipping sectors and leading cruise lines. Currently, Aegean has a global presence in 20 markets, including Vancouver, Montreal, Mexico, Jamaica, Trinidad and Tobago, West Africa, Gibraltar, U.K., Northern Europe, Piraeus, Patras, the United Arab Emirates, Singapore, Morocco, the Antwerp-Rotterdam-Amsterdam (ARA) region, Las Palmas, Tenerife, Cape Verde, Panama and Hong Kong, and plans to commence operations in Barcelona, Spain during the first quarter of 2013. The Company has also entered into a strategic alliance to extend its global reach to China. To learn more about Aegean, visit http://www.ampni.com.

Cautionary Statement Regarding Forward-Looking Statements
Matters discussed in this press release may constitute forward-looking statements. The Private Securities Litigation Reform Act of 1995 provides safe harbor protections for forward-looking statements in order to encourage companies to provide prospective information about their business. Forward-looking statements include statements concerning plans, objectives, goals, strategies, future events or performance, and underlying assumptions and other statements, which are other than statements of historical facts.

The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this cautionary statement in connection with this safe harbor legislation. The words “believe,” “intend,” “anticipate,” “estimate,” “project,” “forecast,” “plan,” “potential,” “may,” “should,” “expect” and similar expressions identify forward-looking statements. The forward-looking statements in this press release are based upon various assumptions, many of which are based, in turn, upon further assumptions, including without limitation, our management’s examination of historical operating trends, data contained in our records and other data available from third parties. Although we believe that these assumptions were reasonable when made, because these assumptions are inherently subject to significant uncertainties and contingencies which are difficult or impossible to predict and are beyond our control, we cannot assure you that we will achieve or accomplish these expectations, beliefs or projections.

In addition to these important factors, other important factors that, in our view, could cause actual results to differ materially from those discussed in the forward-looking statements include our ability to manage growth, our ability to maintain our business in light of our proposed business and location expansion, our ability to obtain double hull secondhand bunkering tankers, the outcome of legal, tax or regulatory proceedings to which we may become a party, adverse conditions in the shipping or the marine fuel supply industries, our ability to retain our key suppliers and key customers, material disruptions in the availability or supply of crude oil or refined petroleum products, changes in the market price of petroleum, including the volatility of spot pricing, increased levels of competition, compliance or lack of compliance with various environmental and other applicable laws and regulations, our ability to collect accounts receivable, changes in the political, economic or regulatory conditions in the markets in which we operate, and the world in general, our failure to hedge certain financial risks associated with our business, our ability to maintain our current tax treatments and our failure to comply with restrictions in our credit agreements and other factors. Please see our filings with the Securities and Exchange Commission for a more complete discussion of these and other risks and uncertainties.

SOURCE Aegean Marine Petroleum Network Inc.


Source: PR Newswire