WFS Ready to Make "Pretty Serious Dent" in M&A Space

by Ship & Bunker News Team
Monday November 2, 2015

Strong cash flows at World Fuel Services (WFS) mean that the company is looking to become more active in mergers and acquisitions in the near future, according to CEO Michael J. Kasbar.

"We have got a lot of cash on hand and granted a lot of that is offshore, which increases our appetite to do some acquisitions over in other parts of the world," he said during last week's Q3 earnings call.

The company reported a net cash from operating activities of $325 million in the first nine months of the year, a significant jump from $129 million this time last year.

"But even domestically, we have liquidity to make a pretty serious dent in the M&A space while maintaining a solid balance sheet profile, which is something we are always very focused on," he added.

Part of the company's success is that WFS has been actively taking market share in the fuel oil market, according to Kasbar, which he considers a feat given the continued weakness of global shipping. 

"I think the fact that we are still billing reasonably well it's just testimony to the value of our business model," he said. 

Despite heightening cash flows, the company has posted declining revenues in all three quarters reported so far in 2015. 

Earlier this year, Ship & Bunker reported that Zacks Investment Research had downgraded WFS to "sell" because the company's lower revenues, though the company subsequently raised its rating up to "hold."

Ship & Bunker News Team
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