Chemoil Increase Bunkers Sales By 16% in 2012

Chemoil said wholesale-retail price spreads are improving for suppliers

The bunker sales volume for Chemoil Energy Limited [AV5.SI] (Chemoil) jumped 15 percent in the fourth quarter of 2012 to 5.3 million metric tonnes (mt) compared with 4.6 million mt in the same period last year, while volumes for the full year rose 16 percent year-on-year to 20.3 million mt, the company reports.

Chemoil said its bunker trading business, exwharf sales in Asia and Europe, and cargo sales in the Americas were all behind the increase.

Lower oil prices in the fourth quarter pushed its average sales price down 6 percent over the same period last year to an average of $639.1 per metric tonne (pmt) it said, but the average sale price for the full year was up 8 percent to $668.4 pmt, with an average purchase cost for the year of $657.0 pmt.

"Compared to 2011 when there were significant margin improvements in major sales locations especially in the first and the last quarters, 2012 presented a challenging trading environment with weakness in the shipping markets and economic uncertainties in Europe," the company said.

"Although the group was able to sell additional volumes in general and perform well in the Americas, our operations in Asia and Europe were affected by sustained pressure on margins."

For the fourth quarter, Chemoil reported a profit of $132 million on revenues and other gains of $3.3 billion, thanks to $166.8 million in profits from discontinued operations, reflecting the sale of a Singapore storage facility.

The company sold the Jurong Island facility to Oiltanking GmbH. for $285 million as part of its adoption of an "asset-light" business model.

For the full year, the company had a profit of $150 million on revenues and other gains of $13.7 billion.

For 2013, the company predicted weak demand for marine fuel oil due to slow economic growth, weak shipping demand, and shippers' use of slow-steaming to save fuel.

"The wholesale - retail spreads however are improving benefiting marine fuels suppliers," the company said.

"The European economic situation and the possibility of conflict in [the] Middle East will be factors influencing demand and prices."