Chemoil's Profits Up More than 400% in Q2

Chemoil said it focused on improving its margins

Chemoil Energy Ltd (Chemoil) reports in the second quarter of 2013 it more than quadrupled its profits to $11.4 million year-over-year, even as revenue dropped 8 percent to $3.2 billion.

"Higher margins mainly in the Americas on our traditional marine fuel business as well as the more recent renewables and chemicals business contributed to the improved performance," the company said.

Total volumes over the quarter fell 5.3 percent to 4.7 million metric tonnes (mt), while retail volumes dropped 1.5 percent to 2.6 million mt.

Average sales value for the period fell 3.8 percent to $661.8 per mt, while average purchase cost fell 3.3 percent to $655.2 per mt.

Gross contribution - revenue minus derivative financial instruments and certain other expenses - rose 39.5 percent to $48.2 million.

The change in gross contribution partly reflected a $2 million reduction in barging expenses, mainly due to reduced costs in the Americas, and a $1 million drop in chartering expenses because of reduced third-party chartering.

"We showed relatively good performance in the second quarter and focused on ensuring good margins, a result that can be seen in our improved profitability," said CEO Tom Reilly.

"Although, volumes improved slightly in Asia and Europe, volume reduction in the Americas led to our overall volume reduction as a group."

Going forward, Reilly said, the acquisition of Colonial Marine's marine fuels business in the southeastern U.S. should help grow volumes in the Americas.

Chemoil closed the deal with Colonial, which has bunker supply operations in Savannah, Charleston, and Jacksonville, in July.