Aegean Marine Petroleum Increases Q4 Earnings 150.2%
Aegean Marine Petroleum Network Inc., an international marine fuel logistics company that markets and physically supplies refined marine fuel and lubricants to ships in port and at sea, announced financial and operating results for the fourth quarter and the year ended December 31, 2007.
The Company recorded net income of $6.3 million, or $0.15 basic and diluted earnings per share, for the three months ended December 31, 2007. For purposes of comparison, the Company reported net income of $5.9 million, or $0.19 basic and diluted earnings per share, for the three months ended December 31, 2006. The weighted average basic and diluted shares outstanding for the three months ended December 31, 2006 were 31,683,098 and 31,683,609, respectively. For the three months ended December 31, 2007, the weighted average basic and diluted shares outstanding were 42,438,214 and 42,618,362, respectively.
Total revenues for the three months ended December 31, 2007 increased 150.2% to $500.6 million compared to $200.1 million for the same period in 2006. For the three months ended December 31, 2007, sales of marine petroleum products increased 152.6% to $497.3 million compared to $196.9 million for the same period in 2006.
Results for the fourth quarter of 2007 were driven by a 62.8% increase in the gross spread on marine petroleum products to $29.3 million compared to $18.0 million for the same period in 2006. For the three months ended December 31, 2007, the volume of marine fuel sold increased 56.5% to 1,026,395 metric tons compared to 655,892 metric tons for the same period in 2006, as sales volumes in the Company's service centers located in Gibraltar, Singapore and the United Arab Emirates improved significantly. Furthermore, results for the fourth quarter of 2007 included sales volumes from Aegean's new service center in Northern Europe following consummation of the Company's acquisition of Bunkers at Sea NV in October 2007. During the three months ended December 31, 2007, the gross spread per metric ton of marine fuel sold increased by $1.1 per metric ton from the same period in 2006, to $28.4 per metric ton.
Operating income for the three months ended December 31, 2007 increased 20.5% to $8.8 million compared to $7.3 million for the same period in 2006. 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 $23.8 million for the three months ended December 31, 2007, compared to $13.9 million for the same period in 2006. This increase was principally due to a larger fleet of bunkering tankers and floating storage facilities owned and operated by the Company during the fourth quarter of 2007 compared to the fourth quarter of 2006. Additionally, the Company incurred substantially higher general and administrative costs associated with Aegean's public company status as well as expenditures related to the Company's expanded infrastructure.
Net income for the three months ended December 31, 2007, which totaled $6.3 million, was adversely affected by higher interest costs, as compared to net income of $5.9 million during the same period in 2006. During the fourth quarter of 2007, the age of Aegean's trade payables further declined as a direct result of marine fuel cargo purchases while the age of trade receivables registered positive changes. Furthermore, as of December 31, 2007 marine fuel inventories increased primarily due to the purchase of a marine fuel cargo for a new service center in West Africa made prior to year end in order to accelerate the commencement of operations in this new service center during the first quarter of 2008. These factors, coupled with a double digit increase in oil and gas prices during the fourth quarter of 2007, increased Aegean's working capital excluding cash and debt position which was financed by the Company's revolving overdraft facility.
E. Nikolas Tavlarios, President, commented, "2007 was a year of considerable success and expansion for Aegean, as the Company enhanced its leadership role as a full-service provider of marine fuel services. We maintained our focus on the execution of our well-capitalized growth plan during the fourth quarter, which led to a 56.5% increase in the volume of marine fuel sold compared to the year-earlier period. Specifically, we took delivery of three 4,600 dwt bunkering tanker newbuildings, the Serifos, the Kithnos and the Amorgos, in the fourth quarter. Complementing the growth in our double-hull delivery capabilities, we expanded Aegean's global network for the physical supply of marine fuel with the launch of our latest service center in Northern Europe. Building on this success, we have commenced physical supply operations in West Africa in January 2008 and we plan to commence physical supply operations in the United Kingdom during the first quarter of 2008, thereby increasing our global network to eight service centers."
Mr. Tavlarios added, "Since our IPO in December of 2006, we have taken delivery of four double-hull bunkering tanker newbuildings as well as four bunkering tankers acquired in the secondary market. We have also taken delivery of two double-hull storage tankers in 2007 to mitigate potential supply shortages. The Company remains on track to expand its fleet to a total of 44 double-hull bunkering tankers by the end of 2010, including 10 remaining double-hull newbuilding bunkering tankers scheduled for delivery in 2008. With an expansive, integrated solution for the worldwide delivery of marine fuel combined with the positive industry fundamentals, we believe Aegean is well positioned to further increase sales volumes as we continue to execute our growth strategy."