WFS Q1 Marine Income Down Despite Increased Volumes

World Fuel Services said it will continue to actively compete in the marine sector

Marine segment revenue for U.S.-based fuel logistics supply company World Fuel Services Corp. [NYSE:INT] (WFS) dropped around 5 percent to $3.7 billion in the first quarter of 2013, down from $3.9 billion in the same quarter last year, the company reports.

The segment's income for the period fell by almost 45 percent to $15.2 million, from $27.4 million in the period last year, with the drop attributed to lower average bunker fuel prices, partially offset by increased volume.

"The market in Marine continues to present a formidable challenge as our first quarter result show," President and CEO Michael Kasbar said in the company's earnings call.

"While volume was up both sequentially and year-over-year gross profit declined as our business mix shifted further towards blue chip customers in major ports and there was also limited price volatility during the quarter."

Bunker volumes for the first quarter were 6.8 million metric tonnes (mt), up 200,000 mt or 3% compared to last quarter, and up 400,000 mt or 6% year-over-year.

Despite the tough market conditions and reduced income, Kasbar said the company's  disciplined approach to risk and credit will help it to continue to actively compete in the marine sector.

"Though we don't anticipate a fundamental shift in industry dynamics in the near-term, early results to date indicate an improved outcome in marine in the second quarter," he said.

Despite the marine segment results, the overall company increased its net income to $48.7 million on revenues of $10.2 billion in the first quarter of 2013 compared with a profit of $46.4 million and revenues of $9.5 billion in the same quarter last year.

Both of WFS's other segments, land and aviation, saw stronger results in the latest quarter than in Q1 2012.

"Overall, we are pleased with our results," Kasbar said.