Aegean Reports Strong 2014 Despite OW Bunker Bad Debts, Vessel Sale Losses

"2014 was a landmark year for Aegean," said Tavlarios

Aegean Marine Petroleum Network (Aegean) [NYSE:ANW] Monday announced strong results for quarter four (Q4) and full year, 2014, though bad debts related to OW Bunker and losses on vessel sales brought full year net income below that reported for 2013.

"2014 was a landmark year for Aegean," said group President, E. Nikolas Tavlarios.

Net income for Q4 2014 was up 6.8 percent year-on-year to $7.5 million, and hit $10.4 million after accounting for non-recurring costs, which reports suggest met market expectations for per share income of $0.22.

But total reported net profit for the year dipped to $17.6 million for 2014, compared to $27.0 million for the prior year.

Full year net income was hit by one-off costs, primarily heavy losses on the sale of certain vessels and a bad debt expense of $3.3 million relating to money owed by the now-defunct OW Bunker group.

Adjusted for non-recurring expenses, however, net income for 2014 was up strongly at £37.8 million.

The group also reported that its total spread on the sale of marine fuel was up 18.6 percent year-on-year to $300.2 million after increased sales volumes and improved spread per metric tonne (pmt).

Total sales volumes of marine fuel and lubricants, almost all of which was marine fuel, for Q4 jumped to over 3.0 million tonnes from under 2.4 million tonnes in the same period of 2013.

Full year volumes also increased to over 11.3 million tonnes versus 9.9 million tonnes the prior year.

Spread per unit sold increased to an average of $26.5 pmt compared to $25.4 pmt for 2013.

Tavlarios pointed to important expansions that occurred during the year.

OW Bunker: A Double Edged Sword

"We have already fully integrated our new operations in the Gulf of Mexico and the Port of Los Angeles, and are close to completing the integration of our new operations in Hamburg, Germany, and St. Petersburg, Russia," said Tavlarios.

"In addition, we launched our long-awaited Fujairah storage facility, fully integrated our U.S. East Coast operations, and continued to streamline our expenses to maximize utilization of our fleet."

During the year, the group reduced its owned bunkering fleet from 51 vessels at the end of 2013 to 48 vessels at the end of last year.

While bad debts relating to the collapse of rival OW Bunker weighed on Aegean's results, the group was elsewhere able to capitalise on the opportunities left by OW Bunker's exit from the market.

"We took advantage of recent sector turbulence to expand into new markets, and announced new operations across four continents," said Tavlarios.

"We look forward to evaluating additional expansion opportunities and leveraging our strengthened global position to drive continued growth and value creation."

At the close of 2014, the group announced a bond issue of over $42 million, ostensibly to help pay for expansion plans.

In February, rival company World Fuel Services, who along with Aegean was tipped for growth following OW Bunker's collapse, said profitability had bounced back to "peak levels" for its marine business and, earlier this month, announced it would raise its quarterly dividend for Q4 2014 by 60 percent.