Aegean Marine Highlights 2Q Financial Results



Aegean Marine announced financial and operating results for the second quarter ended June 30, 2010.

Second Quarter and Year-to-Date Highlights

  • Increased sales volumes by 88.5% to 2,825,046 metric tons in Q2 2010, compared to 1,498,937 metric tons for Q2 2009.
  • Expanded net revenues to $68.3 million.
  • Reported EBITDA (as defined in Note 1) of $27.5 million in Q2 2010, EBITDA as adjusted for one-time expenses was $29.7 million.
  • Reported operating income of $19.2 million.
  • Reported net income of $12.0 million, or $0.25 basic and diluted earnings per share; net income adjusted for one-time expenses was $14.2 million, or $0.30 basic and diluted earnings per share.
    • Net income before income tax related to the income contributed by Verbeke Bunkering N.V. was $16.4 million or $0.35 basic and diluted earnings per share.
  • Continued expanding global presence and logistics infrastructure:
    • Completed acquisition of Verbeke Bunkering N.V., solidifying Aegean Marine's presence in the ARA region.
    • Acquired the Shell Las Palmas terminal in the Canary Islands, increasing the Company's global network to 16 markets covering more than 40 ports.
    • Took delivery of three double-hull bunkering tanker newbuildings during Q2 2010 and one to date in Q3 2010.
  • Secured new credit facilities and expanded existing facilities in aggregate of $185 million, increasing total access to more than $700 million in working capital credit facilities.

The Company reported net income for the three months ended June 30, 2010 of $12.0 million, or $0.25 basic and diluted earnings per share. Net income adjusted for a $1.5 million loss from sale of a vessel and other non-recurring expenses was $14.2 or $0.30 basic and diluted earnings per share. For purposes of comparison, for the three months ended June 30, 2009 the Company reported adjusted net income of $12.1 million excluding a one-time gain of $4.2 million, or $0.29 basic and $0.28 diluted earnings per share. The weighted average basic and diluted shares outstanding for the three months ended June 30, 2010 were 47,009,059 and 47,365,777, respectively following the company's repurchase of 1 million shares in May 2010. The weighted average basic and diluted shares outstanding for the three months ended June 30, 2009 were 42,576,830 and 42,728,588 respectively.

Total revenues for the three months ended June 30, 2010, increased by 146.3% to $1,336.6 million compared to $542.6 million for the same period in 2009. For the three months ended June 30, 2010, sales of marine petroleum products increased by 147.5% to $1,331.8 million compared to $538.2 million for the year-earlier period. Net revenue, which equals total revenue less cost of goods sold and cargo transportation expenses, increased by 44.7% to $68.3 million in the second quarter of 2010 compared to $47.2 million in the year-earlier period.

For the three months ended June 30, 2010, the volume of marine fuel sold increased by 88.5% to 2,825,046 metric tons compared to 1,498,937 metric tons in the year-earlier period, as sales volumes increased across major markets. Furthermore, results for the second quarter of 2010 included sales volumes from Aegean Marine's acquisition of Verbeke Bunkering N.V., which closed on April 1, 2010.

Operating income for the second quarter of 2010 was $19.2 million compared to $17.6 million including a non-recurring gain of $4.2 million on the sale of vessels for the same period in 2009. Operating expenses, excluding the cost of fuel and cargo transportation costs, increased to $49.1 million for the three months ended June 30, 2010 compared to $33.8 million for the same period in 2009.

E. Nikolas Tavlarios, President commented, "During the second quarter, Aegean Marine continued to expand its global market share for the physical supply of marine fuel, enabling the Company to increase both sales volumes and EBITDA by 88.5% and 12.7%, respectively, compared to the year-earlier period. Consistent with management's strategy to expand its brand and scale, we completed the acquisition of Verbeke Bunkering at the onset of the second quarter, cementing our presence in the world's second largest bunkering market. Building upon our success, we acquired the Shell Las Palmas terminal in the Canary Islands, which lie along major trans-Atlantic seaborne trade routes. Importantly, the terminal includes dedicated land storage facilities that broaden our new onshore storage facilities under development in, Jamaica, Morocco and the UAE where we expect to commence construction of a facility with approximate capacity of 3 million barrels in September 2010. Including our latest acquisition, which closed in July 2010, Aegean Marine has more than tripled its vast global network to 16 markets covering over 40 ports compared to 5 at the time of our IPO in December 2006."

Mr. Tavlarios continued, "In addition to penetrating new markets and increasing our in-land storage capacity, we further enhanced our high-quality logistics infrastructure with the delivery of three double-hull bunkering tanker newbuildings in the second quarter and one to date in the current third quarter. Going forward, we expect to complete our fully financed newbuild program with the delivery of nine remaining double-hull bunkering tanker newbuildings over the next six months. By expanding our fully integrated marine fuel platform from procurement to delivery, combined with our burgeoning marine lubricant business, we remain well positioned to strengthen our global brand recognition and increase the Company's earnings power."

For the six months ended June 30, 2010, the Company recorded net income of $26.1 million, or $0.56 basic and diluted earnings per share, compared to net income of $20.7 million, or $0.49 basic and diluted earnings per share, for the year-earlier period. The weighted average basic and diluted shares outstanding for the six month period ended June 30, 2010 were 46,401,403 and 46,595,609, respectively. The weighted average basic and diluted shares outstanding for the six months ended June 30, 2009 were 42,565,254 and 42,565,254, respectively.

For the six months ended June 30, 2010, the volume of marine fuel sold increased 61.8% to 4,545,559 metric tons compared to 2,808,974 metric tons in the year-earlier period.

Operating income for the six months ended June 30, 2010 was $36.6 million compared to $25.9 million for the same period in 2009.

Liquidity and Capital Resources

As of June 30, 2010, the Company had cash and cash equivalents of $52.1 million and working capital of $116.4 million. Non-cash working capital, or working capital excluding cash and debt, was $379.7 million as of June 30, 2010.

Net cash used in operating activities was $22.1 million for the three months ended June 30, 2010. Net income, as adjusted for non-cash items, was $25.8 million for the period.

Net cash used in investing activities was $79.9 million for the three months ended June 30, 2010, mainly due to the acquisition of Verbeke Bunkering business and advances paid for both vessels under construction and acquisition of vessels.

Net cash provided by financing activities was $15.3 million for the three months ended June 30, 2010, primarily driven by the proceeds from long-term debt.

As of June 30, 2010, the Company had approximately $170.5 million in available liquidity to finance working capital requirements, which includes unrestricted cash and cash equivalents and available undrawn amounts under the Company's short-term working capital facilities. Furthermore, as of June 30, 2010, the Company had funds of approximately $54.0 million available under its secured term loans to finance the construction of its new double-hull bunkering tankers.

Spyros Gianniotis, Chief Financial Officer, stated, "Our operating results for the second quarter of 2010 were led by sales volumes growth in our core markets as well as notable contributions from our wholly owned subsidiary, Verbeke Bunkering, which we acquired on April 1, 2010. As we successfully integrated the largest acquisition in Aegean Marine's history, we further enhanced the Company's financial position. Specifically, we secured new credit facilities and expanded existing facilities under favorable terms with global lending institutions in aggregate of approximately $185 million, increasing our current total to more than $700 million in working capital credit facilities. Our significant access to capital provides a distinct competitive advantage as we continue to meet the strong demand for Aegean Marine's integrated marine fuel services and execute management's growth strategy."