AEGEAN MARINE PETROLEUM NETWORK INC. NEW YORK, Aug. 10, 2016 /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, 2016.
Second Quarter Financial Highlights
Compared to prior year period:
-- Increased sales volumes by 29.9% to 4,092,789 metric tons.
-- Increased gross profit by 19.0% to $93.4 million compared to prior year.
-- Increased operating income by 95.3% to $28.9 million.
-- Increased operating income adjusted for a loss on sale of non-core
vessels by 111.5% to $31.3 million.
-- Recorded GAAP net income attributable to Aegean shareholders of $13.5
million or $0.27 basic and diluted earnings per share.
-- Net income adjusted for a loss on sale of non-core vessels was $16.0
million or $0.32 basic and diluted earnings per share.
-- Generated record adjusted EBITDA of $37.9 million.
-- Sold two non-core vessels, enabling $5 million in debt pay down, which
is expected to result in operating cost reductions of approximately $6.4
million on an annual basis.
Second Quarter Operational Highlights
-- Ramped-up operations in Algoa Bay, South Africa, further expanding
global platform.
-- Further optimized operations through the sale of two non-core vessels.
-- Strategically relocated certain vessels from lower-activity markets to
higher-growth regions.
E. Nikolas Tavlarios, Aegean's President, commented, "We generated strong operational and financial results in the quarter and are pleased with the momentum we have going into the second half of the year. During the second quarter we increased sales volumes and improved performance in many key markets, including our new operations in South Africa and Brazil. Our top- and bottom-line results benefitted from our initiatives to strengthen our global platform and optimize our geographic footprint. Our decisions to sell non-core vessels will result in cost reductions and align with our focus on strategically allocating our resources to swiftly respond to fluctuations in demand and capitalize on opportunities in markets where we see the most potential."
Mr. Tavlarios concluded, "We are seeing strong indications of continued growth for the full year 2016 and remain confident in our ability to drive profitability and increase volumes across our platform to deliver enhanced shareholder value."
Generating Solid Financial Results
-- Revenue - The Company reported total revenue of $987.6 million for the
second quarter of 2016, a decrease of 18.2% compared to the same period
in 2015, primarily due to the drop in oil prices. Voyage and other
revenues decreased to $19.8 million or by 8.8% compared to the same
period in 2015.
-- Gross Profit - Gross Profit, which equals total revenue less directly
attributable cost of revenue increased by 19.0% to $93.4 million in the
second quarter of 2016 compared to $78.5 million in the same period in
2015.
-- Operating Expense - The Company reported operating expense of $64.5
million for the second quarter of 2016, an increase of $0.8 million or
1.3% compared to the same period in prior year. Adjusting for the sale
of non-core assets, operating expense was $62.1 million, a decrease of
2.5% compared to the same period in the prior year.
-- Operating Income - Operating income for the second quarter of 2016
adjusted for the sale of non-core assets was $31.3 million, an increase
of 111.5% compared to the same period in the prior year.
-- Net Income - Net income attributable to Aegean shareholders adjusted for
the sale of non-core vessels was $16.0 million, or $0.32 basic and
diluted earnings per share, an increase of $8.9 million or 125.4%
compared to the same period in 2015.
Operational Metrics
-- Sales Volume - For the three months ended June 30, 2016, the Company
reported marine fuel sales volumes of 4,092,789 metric tons, an increase
of 29.9% compared to the same period in 2015.
-- Adjusted EBITDA Per Metric Ton of Marine Fuel Sold - For the three
months ended June 30, 2016, the Company reported adjusted EBITDA per
metric ton of marine fuel sold of $9.26. Adjusted EBITDA per metric ton
of marine fuel sold in the prior year period was $7.63 per metric ton.
-- Gross Spread Per Metric Ton of Marine Fuel Sold - For the three months
ended June 30, 2016, the Company reported gross spread per metric ton of
marine fuel sold on an aggregate basis of $20.9. Gross spread per metric
ton of marine fuel sold in the prior year period was $22.5.
Liquidity and Capital Resources
-- Net cash used in operating activities was $60.4 million for the three
months ended June 30, 2016. Net income as adjusted for non-cash items
(as defined in Note 9 below) was $37.1 million for the same period.
-- Net cash provided by investing activities was $7.9 million for the three
months ended June 30, 2016, primarily due to the sale of two non-core
vessels.
-- Net cash provided by financing activities was $44.5 million for the
three months ended June 30, 2016, mainly due to the drawdown of
short-term debt.
-- As of June 30, 2016, the Company had cash and cash equivalents of $127.8
million and working capital of $387.6 million. Non-cash working capital,
or working capital excluding cash and debt, was $581.6 million.
-- As of June 30, 2016, the Company had $867.8 million of undrawn amounts
under its working capital facilities and $127.8 million of unrestricted
cash and cash equivalents to finance working capital requirements.
-- The weighted average basic and diluted shares outstanding for the three
months ended June 30, 2016, was 48,117,508. The weighted average basic
and diluted shares outstanding for the three months ended June 30, 2015
was 47,366,134.
Spyros Gianniotis, Aegean's Chief Financial Officer, stated, "During the quarter, we achieved strong adjusted EBITDA per metric ton of marine fuel sold of $9.26, a 43.8% increase quarter over quarter. While we achieved strong results across the board, we believe adjusted EBITDA per metric ton of marine fuel sold best reflects our operational improvements. In the second quarter we also reported a 29.9% year over year increase in volumes and improved performance without increase in operating expenses. Financial flexibility and a strong balance sheet remain important differentiators for our business. The two vessel sales during the quarter enabled us to pay down $5 million of debt and is expected to help eliminate approximately $6.4 million in operating costs on an annual basis. We have and intend to continue to actively manage our business while de-levering and strengthening our balance sheet to drive results for all Aegean shareholders."
Summary Consolidated Financial and Other Data (Unaudited)
For the Three Months Ended For the Six Months Ended
June 30, June 30,
2015 2016 2015 2016
---- ---- ---- ----
(in thousands of U.S. dollars, unless otherwise stated)
Income Statement
Data:
Revenues -third
parties $1,203,100 $982,337 $2,214,056 $1,730,853
Revenues -related
companies 4,607 5,219 8,754 9,635
----- ----- ----- -----
Total revenues 1,207,707 987,556 2,222,810 1,740,488
Cost of revenues -
third parties 1,078,112 876,495 1,970,384 1,538,121
Cost of revenues-
related companies 51,114 17,682 93,323 28,120
------ ------ ------ ------
Total cost of
revenues 1,129,226 894,177 2,063,707 1,566,241
--------- ------- --------- ---------
Gross profit 78,481 93,379 159,103 174,247
------ ------ ------- -------
Operating expenses:
Selling and
distribution 52,744 49,943 102,561 100,715
General and
administrative 10,602 11,823 20,908 23,319
Amortization of
intangible assets 375 297 749 597
Loss on sale of
vessels - 2,437 130 2,437
Operating income 14,760 28,879 34,755 47,179
Net financing cost (8,813) (12,477) (18,139) (21,838)
Foreign exchange
gains /(losses),
net 658 (1,922) 692 (1,683)
Income tax benefit
/(expense) 543 (947) 2,064 1,645
--- ---- ----- -----
Net income 7,148 13,533 19,372 25,303
----- ------ ------ ------
Less income
attributable to
non-controlling
interest - 8 - 8
--- --- --- ---
Net income
attributable to
AMPNI shareholders $7,148 $13,525 $19,372 $25,295
====== ======= ======= =======
Basic earnings per
share (U.S.
dollars) $0.15 $0.27 $0.40 $0.51
Diluted earnings
per share (U.S.
dollars) $0.15 $0.27 $0.40 $0.51
EBITDA(1) $24,052 $35,459 $51,859 $62,606
Other Financial
Data:
Gross spread on
marine petroleum
products(2) $71,773 $86,504 $143,383 $161,572
Gross spread on
lubricants(2) 949 1,031 2,188 1,765
Gross spread on
marine fuel(2) 70,824 85,473 141,195 159,807
Gross spread per
metric ton of
marine fuel sold
(U.S. dollars) (2) 22.5 20.9 23.3 19.2
Net cash used in
operating
activities $(59,301) $(60,441) $(83,052) $(49,497)
Net cash (used in)
/provided by
investing
activities (4,784) 7,878 (7,628) (877)
Net cash provided
by financing
activities 11,822 44,515 6,671 38,491
Sales Volume Data
(Metric Tons): (3)
Total sales volumes 3,150,950 4,092,789 6,066,400 8,305,425
--------- --------- --------- ---------
Other Operating
Data:
Number of owned
bunkering tankers,
end of period(4) 49.0 47.0 49.0 47.0
Average number of
owned bunkering
tankers(4)(5) 49.0 48.4 48.5 48.7
Special Purpose
Vessels, end of
period(6) 1.0 1.0 1.0 1.0
Number of operating
storage
facilities, end of
period(7) 15.0 14.0 15.0 14.0
Summary Consolidated Financial and Other Data (Unaudited)
As of As of
December 31, June 30,
2015 2016
---- ----
(in thousands of U.S.
dollars,
unless otherwise
stated)
Balance Sheet Data:
Cash and cash equivalents 139,314 127,751
Gross trade receivables 317,152 405,399
Allowance for doubtful accounts (7,278) (8,604)
Inventories 114,531 168,170
Current assets 730,950 857,570
Total assets 1,450,011 1,558,961
Trade payables 72,417 108,572
Current liabilities (including
current portion of long-term
debt) 389,109 469,928
Total debt 710,015 758,596
Total liabilities 828,485 909,546
Total stockholder's equity 621,526 649,415
Working Capital Data:
Working capital(8) 341,841 387,642
Working capital excluding cash
and debt(8) 477,594 581,642
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. Adjusted EBITDA represents net income before interest, taxes, depreciation and amortization, vessel and investment impairments, gains/losses on vessel disposals and other non-recurring exceptional items. EBITDA and adjusted EBITDA are included herein because they are a basis upon which the Company assesses its operating performance.
Adjusted EBITDA per metric ton of marine fuel sold represents the net income before interest, taxes, depreciation and amortization, vessel and investment impairments, gains/losses on vessel disposals and other non-recurring exceptional items the Company generates per metric ton of marine fuel sold. The Company calculates adjusted EBITDA per metric ton of marine fuel sold by dividing the EBITDA by the sales volume of marine fuel. Marine fuel sales do not include sales of lubricants.
The following table reconciles net income attributable to AMPNI to EBITDA, adjusted EBITDA and adjusted EBITDA per metric ton of marine fuel sold for the periods presented:
For the Three Months Ended June For the Six Months Ended June
30, 30,
-------------------------------- ------------------------------
2015 2016 2015 2016
---- ---- ---- ----
(in thousands of U.S. dollars,
unless otherwise stated)
-----------------------
Net income to
AMPNI
shareholders 7,148 13,525 19,372 25,295
Add: Net financing
cost including
amortization of
financing costs 8,813 12,447 18,139 21,838
Add: Income tax
(benefit) /
expense (543) 947 (2,064) (1,645)
Add: Depreciation
and amortization
excluding
amortization of
financing costs 8,634 8,510 16,412 17,118
EBITDA 24,052 35,459 51,859 62,606
------ ------ ------ ------
Add: Loss on sale
of vessels - 2,437 130 2,437
--- ----- --- -----
Adjusted EBITDA 24,052 37,896 51,989 65,043
------ ------ ------ ------
Sales volume of
marine fuel
(metric tons) 3,150,950 4,092,789 6,066,400 8,305,425
--------- --------- --------- ---------
Adjusted EBITDA
per metric ton of
marine 7.63 9.26 8.57 7.83
fuel sold (U.S.
dollars)
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 For the Six Months Ended
June 30,
June 30,
--------
2015 2016 2015 2016
---- ---- ---- ----
(in thousands of U.S. dollars,
unless otherwise stated)
-----------------------
Sales of
marine
petroleum
products 1,189,488 967,808 2,184,033 1,702,623
Less: Cost of
marine
petroleum
products
sold (1,117,715) (881,304) (2,040,650) (1,541,051)
Gross spread
on marine
petroleum
products 71,773 86,504 143,383 161,572
Less: Gross
spread on
lubricants (949) (1,031) (2,188) (1,765)
---- ------ ------ ------
Gross spread
on marine
fuel 70,824 85,473 141,195 159,507
Sales volume
of marine
fuel (metric
tons) 3,150,950 4,092,789 6,066,400 8,305,425
--------- --------- --------- ---------
Gross spread
per metric
ton of
marine fuel
sold (U.S.
dollars) 22.5 20.9 23.3 19.2
==== ==== ==== ====
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 include the sales volume of lubricants in the calculation of gross spread per metric ton of marine fuel sold.
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. The Company owns two barges, the Mediterranean and Umnenga, as floating storage facilities in Greece and South Africa. The Company also operates on-land storage facilities in Las Palmas, Fujairah, Tangiers, Panama, the U.S.A., Hamburg and Barcelona.
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, gain/loss on sale of vessels, impairment losses, unrealized loss/(gain) on derivatives and unrealized foreign exchange loss/(gain), net, is used to assist in evaluating our 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. The following table reflects the calculation of net income as adjusted for non-cash items for the periods presented:
For the Three Months For the Six Months
Ended Ended
June 30, June 30,
-------- --------
2015 2016 2015 2016
---- ---- ---- ----
(in thousands of U.S. dollars,
unless otherwise stated)
-----------------------
Net income 7,148 13,533 19,372 25,303
Add: Depreciation 6,375 6,353 12,636 12,792
Add: Provision for
doubtful accounts 765 640 1,409 1,421
Add: Share based
compensation 2,304 2,179 4,965 4,588
Add: Amortization 4,530 4,585 9,014 9,151
Add: Net deferred tax
expense /(benefit) (531) 920 (2,548) (1,959)
Add: Unrealized loss
on derivatives 8,230 6,566 17,239 34,194
Add: Loss on sale of
vessels - 2,437 130 2,437
Add: Unrealized
foreign exchange
loss /(gain) 146 (118) (539) 89
Net income as
adjusted for non-
cash items 28,967 37,095 61,678 88,016
====== ====== ====== ======
Second Quarter 2016 Dividend Announcement
On August 10, 2016, the Company's Board of Directors declared a second quarter 2016 dividend of $0.02 per share payable on or about September 9, 2016 to shareholders of record as of August 24, 2016. 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 Wednesday, August 10, 2016 at 4:30 P.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 (800) 524-8850 (for U.S.-based callers) or 416-204-9702 (for international callers) and enter the passcode: 2586478.
If you are unable to participate at this time, a replay of the call will be available for two weeks at 888-203-1112 or 719-457-0820. Enter the code 2586478 to access the audio replay. The webcast will also be archived on the Company's website:
http://www.ampni.com.
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 over than 30 markets and a team of professionals ready to serve our customers wherever they are around the globe. For additional information please visit: 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.
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SOURCE Aegean Marine Petroleum Network Inc.
