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Aegean Marine Petroleum Network Inc. Announces Second Quarter 2013 Financial Results

August 19, 2013

PIRAEUS, Greece, Aug. 19, 2013 /PRNewswire/ — Aegean Marine Petroleum Network Inc. (NYSE: ANW) (“Aegean” or the “Company”) today announced financial and operating results for the second quarter ended June 30, 2013.

Second Quarter Highlights

    --  Sales volumes of 2,693,151 metric tons.
    --  Gross profit of $69.5 million.
    --  Operating income of $12.7 million.
        --  Operating income adjusted for the sale of non-core assets was $13.2
            million.
    --  Net income attributable to Aegean shareholders of $5.5 million or $0.12
        basic and diluted earnings per share.
        --  Net income attributable to Aegean shareholders adjusted for the sale
            of non-core assets was $6.1 million or $0.13 basic and diluted
            earnings per share.
    --  EBITDA of $19.7 million. [1]
        --  EBITDA adjusted for the sale of non-core assets was $20.2 million.

[1] Please see below for a reconciliation of EBITDA, a non-GAAP measure, to net income.

E. Nikolas Tavlarios, President, commented, “We extended our track record of operational excellence and strong financial performance in the second quarter, which represented Aegean’s tenth consecutive quarter of profitability. During the quarter we entered new markets to strengthen our revenue base, strategically positioning Aegean for continued success as the market emerges from the current shipping cycle.”

Mr. Tavlarios continued, “We are taking the right steps to sustain growth and position Aegean for opportunities as they emerge. Our expansion into the Port of Algeciras will increase our presence in the rapidly growing Western Mediterranean market, further diversify our revenue base and improve our fleet utilization. During the quarter we also announced a cooperation agreement with SK Lubricants, which will expand our operations in Asia and increase volumes in our marine lubricants business. As we move into the second half of the fiscal year, we will continue to execute our strategy of strengthening our industry leadership and enhancing shareholder value.”

The Company achieved net income attributable to Aegean shareholders for the three months ended June 30, 2013 of $5.5 million, or $0.12 basic and diluted earnings per share. Net income attributable to Aegean shareholders excluding a loss from the sale of non-core assets was $6.1 million or $0.13 basic and diluted earnings per share. For the three months ended June 30, 2012 the Company recorded net income attributable to AMPNI shareholders of $2.7 million, or $0.06 basic and diluted earnings per share. Net income for the three months ended June 30, 2012 adjusted for the sale of non-core assets was $6.9 million or $0.15 basic and diluted earnings per share.

Total revenues for the three months ended June 30, 2013, decreased by 10.4% to $1,691.8 million as compared to $1,888.1 million reported for the same period in 2012. For the three months ended June 30, 2013, sales of marine petroleum products decreased by 10.3% to $1,680.9 million compared to $1,874.6 million for the same period in 2012. Gross profit, which equals total revenue less directly attributable cost of revenue decreased by 13.1% to $69.5 million in the second quarter of 2013 compared to $80.0 million in the same period in 2012.

For the three months ended June 30, 2013, the volume of marine fuel sold by the Company decreased by 0.8% to 2,693,151 metric tons compared to 2,714,176 metric tons in the same period in 2012.

Operating income excluding a non-cash loss from the sale of an older, non-core vessel for the second quarter of 2013 amounted to $13.2 million compared to $19.5 million for the same period in 2012. Operating expenses excluding the non-cash loss from the sale of vessels decreased by $4.2 million, or 6.9%, to $56.3 million for the three months ended June 30, 2013, compared to $60.5 million for the same period in 2012.

Liquidity and Capital Resources

Net cash used in operating activities was $66.4 million for the three months ended June 30, 2013. Net income, as adjusted for non-cash items (as defined in Note 9) was $14.7 million for the period.

Net cash used in investing activities was $20.3 million for the three months ended June 30, 2013, largely due to the advances for other fixed assets under construction.

Net cash provided by financing activities was $87.5 million for the three months ended June 30, 2013, primarily driven by the net change in short term borrowings.

As of June 30, 2013, the Company had cash and cash equivalents of $62.9 million and working capital of $36.1 million. Non-cash working capital, or working capital excluding cash and debt, was $481.0 million.

As of June 30, 2013, the Company had $376.3 million in available liquidity, which includes unrestricted cash and cash equivalents of $62.9 million and available undrawn amounts under the Company’s working capital facilities of $265.7 million, to finance working capital requirements.

The weighted average basic and diluted shares outstanding for the three months ended June 30, 2013 were 45,681,518. The weighted average basic and diluted shares outstanding for the three months ended June 30, 2012 were 45,465,514.

Spyros Gianniotis, Chief Financial Officer, stated, “Our second quarter results demonstrate Aegean’s ability to operate safely and profitably while establishing additional revenue streams and adapting to fluctuating industry conditions. As part of our commitment to strengthen our financial flexibility, we have launched the syndication of our $800 million multicurrency credit facilities during the quarter, a significant milestone for our company. Combined with supplier credit, our new multicurrency credit facilities will allow Aegean to continue to manage volatile marine fuel prices and to further improve its supply and trading performance. We appreciate the support of our lenders and their confidence in our ability to continue delivering profitable revenue growth.”


    Summary Consolidated Financial and Other Data (Unaudited)

                                         For the Three
                                             Months      For the Six Months
                                        Ended June 30,     Ended June 30,

                                              2012            2013               2012        2013
                                              ----            ----               ----        ----

                                            (in thousands of U.S. dollars, unless
                                                      otherwise stated)

     Income
     Statement
     Data:

     Revenues
     -
     third
     parties                            $1,871,757      $1,682,076         $3,664,682  $3,245,978

     Revenues
     -
     related
     companies                              16,303           9,748             34,293      16,337
                                            ------           -----             ------      ------

    Total
     revenues                            1,888,060       1,691,824          3,698,975   3,262,315

    Cost
     of
     revenues
      -
      third
     parties                             1,651,477       1,583,580          3,299,798   3,000,061

    Cost
     of
     revenues-
     related
     companies                             156,573          38,762            242,766     122,049
                                           -------          ------            -------     -------

    Total
     cost
     of
     revenues                            1,808,050       1,622,342          3,542,564   3,122,110
                                         ---------       ---------          ---------   ---------

    Gross
     profit                                 80,010          69,482            156,411     140,205
                                            ------          ------            -------     -------

     Operating
     expenses:

     Selling
     and
     distribution                           52,780          48,622            108,340      99,578

     General
     and
     administrative                          7,360           7,275             14,420      14,240

     Amortization
     of
     intangible
     assets                                    375             374                751         750

    Loss
     on
     sale
     of
     vessels,
     net                                     4,218             512              4,218       3,780
                                             -----             ---              -----       -----

     Operating
     income                                 15,277          12,699             28,682      21,857

    Net
     financing
     cost                                    8,501           7,083             17,054      13,236

    Gain
     on
     sale
     of
     subsidiary,
     net                                         -               -                  -      (4,174)

     Foreign
     exchange
     (gains)
     losses,
     net                                       953              70               (701)       (329)

     Income
     taxes
     expense
     /
     (income)                                2,048             (15)             2,273         396
                                             -----             ---              -----         ---

    Net
     income                                  3,775           5,561             10,056      12,728
                                             -----           -----             ------      ------

    Less
     income
     attributable
     to
     non-
     controlling
     interest                                1,065              21              1,341           2
                                             -----             ---              -----         ---

    Net
     income
     attributable
     to
     AMPNI
     shareholders                           $2,710          $5,540             $8,715     $12,726
                                            ======          ======             ======     =======

    Basic
     earnings
     per
     share
     (U.S.
     dollars)                                $0.06           $0.12              $0.19      $$0.27

     Diluted
     earnings
     per
     share
     (U.S.
     dollars)                                $0.06           $0.12              $0.19      $$0.27

    EBITDA(1)                              $21,007         $19,719            $43,539     $40,740

    Other
     Financial
     Data:

    Gross
     spread
     on
     marine
     petroleum
     products(2)                           $71,281         $63,262           $140,208    $126,446

    Gross
     spread
     on
     lubricants(2)                             545           1,096              1,291       2,155

    Gross
     spread
     on
     marine
     fuel(2)                                70,736          62,166            138,917     124,291

    Gross
     spread
     per
     metric
     ton
     of
     marine                                   26.1            23.1               26.8        24.6

    fuel
     sold
     (U.S.
     dollars)
     (2)

    Net
     cash
     provided
     by
     (used
     in)
     operating
     activities                            $86,301        $(66,365)           $57,643    $(24,184)

    Net
     cash
     used
     in
     investing
     activities                             (7,661)        (20,341)           (18,639)    (23,361)

    Net
     cash
     provided
     by
     (used
     in)
     financing
     activities                            (21,572)         87,524            (21,269)     33,393

    Sales
     Volume
     Data
     (Metric
     Tons):
     (3)

    Total
     sales
     volumes                             2,714,176       2,693,151          5,175,406   5,060,228
                                         ---------       ---------          ---------   ---------

    Other
     Operating
     Data:

     Number
     of
     owned
     bunkering
     tankers,
     end
     of
     period(4)                                57.0            54.0               57.0        54.0

     Average
     number
     of
     owned
     bunkering
     tankers(4)(5)                            57.4            54.2               57.7        54.8

     Special
     Purpose
     Vessels,
     end
     of
     period(6)                                 1.0             1.0                1.0         1.0

     Number
     of
     owned
     storage
     facilities,
     end
     of
     period(7)                                 7.0             5.0                7.0         5.0


    Summary Consolidated Financial and Other Data (Unaudited)

                                         As of                   As of

                                     December 31,              June 30,

                                                   2012                  2013
                                                   ----                  ----

                                    (in thousands of
                                     U.S. dollars,

                                    unless otherwise
                                        stated)

    Balance Sheet Data:

    Cash and cash equivalents                    77,246                62,875

    Gross trade receivables                     477,738               500,332

    Allowance for doubtful
     accounts                                    (3,503)               (3,072)

    Inventories                                 180,826               200,747

    Current assets                              786,795               815,539

    Total assets                              1,431,843             1,474,895

    Trade payables                              242,899               239,085

    Current liabilities
     (including current
     portion of long-term
     debt)                                      734,751               779,398

    Total debt                                  653,286               690,788

    Total liabilities                           927,325               960,184

    Total stockholder's
     equity                                     504,518               514,711

    Working Capital Data:

    Working capital(8)                           51,853                36,141

    Working capital excluding
     cash and debt(8)                           433,484               480,975

Notes:

1. EBITDA represents net income before interest, taxes, depreciation and amortization. EBITDA does 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 June
                                          30,
                                     -----------

                                     2012     2013
                                     ----     ----

                                         (in
                                      thousands
                                       of U.S.
                                      dollars,

                                        unless
                                      otherwise
                                       stated)
                                     ----------

    Net income attributable
     to AMPNI shareholders          2,710    5,540

    Add: Net financing cost
     including amortization         8,501    7,083
       of financing costs

      Add/ (Less): Income tax
       expense/ (income)            2,048      (15)

      Add: Depreciation and
       amortization excluding       7,748    7,111
       amortization of financing
        costs

    EBITDA                         21,007   19,719
                                   ------   ------

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. Gross spread on marine petroleum products, gross spread of MFO and gross spread on lubricants are not items recognized by U.S. GAAP and should not be considered as an alternative to gross profit or any other indicator of a Company’s operating performance required by U.S. GAAP. The Company’s definition of gross spread may not be the same as that used by other companies in the same or other industries. 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 June 30,
                          --------------

                                  2012             2013
                                  ----             ----

    Sales of marine
     petroleum products      1,874,552        1,680,923

    Less: Cost of marine
     petroleum products
     sold                   (1,803,271)      (1,617,661)

    Gross spread on
     marine petroleum
     products                   71,281           63,262

    Less: Gross spread
     on lubricants                (545)          (1,096)
                                  ----           ------

    Gross spread on
     marine fuel                70,736           62,166

    Sales volume of
     marine fuel (metric
     tons)                   2,714,176        2,693,151
                             ---------        ---------

    Gross spread per
     metric ton of
     marine                       26.1             23.1

      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, Vancouver, Montreal, Mexico, Portland (U.K.), Trinidad and Tobago (Southern Caribbean), Tangiers (Morocco), Las Palmas, Tenerife, Panama, Hong Kong, Barcelona 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 June 30, 2013, the Company owned one Aframax tanker, the Leader as a floating storage facility in the 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, Tangiers, Panama, Barcelona and Algeciras.

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 an industry 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 recognized 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.

Second Quarter 2013 Dividend Announcement

On August 19, 2013, the Company’s Board of Directors declared a second quarter 2013 dividend of $0.01 per share payable on September 16, 2013 to shareholders of record as of September 2, 2013. 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 Tuesday, August 20, 2013 at 8:30 a.m. Eastern Time, to discuss its second 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 (888) 455-2260 (for U.S.-based callers) or (719) 325-2463 (for international callers) and enter the passcode: 8677165.

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 September 3, 2013 by dialing (888) 203-1112 or (for U.S.-based callers) or (719) 457-0820 (for international callers) and enter the passcode: 8677165.

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 21 markets, including Vancouver, Montreal, Mexico, Jamaica, Trinidad and Tobago, Gibraltar, U.K., Northern Europe, Piraeus, Patras, the United Arab Emirates, Singapore, Morocco, the Antwerp-Rotterdam-Amsterdam (ARA) region, Las Palmas, Tenerife, Panama, Hong Kong, Barcelona and Algeciras. 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