Market Remains Under Significant Pressure, Says Aegean, After Posting $28.6 million 2017 Q4 Loss

Aegean President Jonathan McIlroy. Image Credit: Aegean

As it had previously warned, Aegean Marine Petroleum Network Inc. [NYSE: ANW] (Aegean) today reported a 2017 Q4 loss of $28.6 million, with a number of big ticket non-recurring items weighing heavily on the result.

"We continue to operate in a highly competitive market that remains under significant pressure, which is reflected in our fourth quarter 2017 and full year results," said Aegean President Jonathan McIlroy.

"Aegean's Q4 2017 loss of $28.6 million includes roughly $15.3 million of non-recurring expense items including $11.0 million of non-cash charges. In addition, the Company experienced approximately $12 million of hedging losses during the fourth quarter as a result of the Company's first in, first out (FIFO) reporting method of inventory cost.

"This loss was recovered in January 2018 when inventory was sold at market prices, and the hedges were closed. Adjusting for all these non-recurring items, our net loss would have been $1.3 million."

Having previously stated it has a target of reducing its global operating expenses by $20 million, today Aegean announced it has achieved and identified roughly $25 million of annual cost reductions and expects to reach $30 million in cost reductions over time.

As part of those measures, Aegean has made a number of operational changes including its exit from the Singapore physical market and downsizing operations in Fujairah. While this these were contributing factors to an 11.6% year-over-year dip in its Q4 bunker sales volume, Aegean's annual volumes for the 2017 calendar year were flat at 16,575,404 mt.

Commenting on the result, Spyros Gianniotis, Aegean's Chief Financial Officer said:

"While our recent results show the significant pressures on the markets in which we operate, we remain confident that we are taking the right steps to position Aegean for long-term growth. The acquisition of HEC diversifies the Company's revenue streams, opens up growth opportunities in the environmental services market and creates potential for synergies within our existing network.

"Once completed, we expect the addition of HEC to be immediately accretive to our operating and financial results and the combined company to accelerate growth moving forward. We will continue our focus on reducing cost, rationalizing and optimizing our presence in key operating hubs and on maximizing asset utilization in order to create value for Aegean shareholders."