Aegean Marine Petroleum Network Inc., a leading international marine fuel logistics company, announced that it expects to report a net loss of approximately $28.2 million, or a loss of $0.69 per share, for the fourth quarter of 2017 (subject to final year-end audit). The fourth quarter of 2017 was impacted by approximately $14.5 million of non-recurring charges that impeded the Company’s performance, including the following:
- $4.5 million in cash charges related to legal, tax and advisory fees; and
- $10.0 million in non-cash charges related to tax and accounting changes, currency translation, non-cash severance, write-offs related to the Company’s closure in Singapore and the loss on the sale of a vessel.
The fourth quarter of 2017 was also impacted by approximately $12 million of losses as a result of the Company’s first in, first out (FIFO) reporting method of inventory cost that created a mismatch when compared to the mark-to-market of the Company’s respective hedges at December 31, 2017. This loss was recovered in January 2018 when inventory was sold at market prices (and not at cost) and the hedges were closed at market.
In addition, Aegean continues to take proactive steps to cut costs and offset the competitive operating environment that persisted throughout 2017. Among other recent actions, the Company has:
- ceased operating its physical supply business in Singapore, where margins were unsupportive of profitable business;
- recalibrated its West Coast U.S. storage footprint to better fit the ongoing business and lower overhead;
- reduced volumes and focused on more profitable businesses in the Fujairah market;
- secured contract cover for the majority of the Company’s clean products tanks in the Fujairah storage facility; and
- continued the active management of our vessel fleet with a dynamic chartering program, including the reactivation of one vessel from hot lay-up and placement of one more vessel in cold lay-up, thereby increasing the total number of vessels in cold lay-up to five.
Jonathan McIlroy, Aegean’s President, commented, “Despite what has continued to be a challenging period in our core business, I am proud of the definitive action our management team has taken to offset market weakness. Our expected fourth quarter headline results do not tell the full story of the cost cutting and bold steps we have taken—such as ceasing our physical supply business in Singapore during the quarter. While business was slower to come back in the wake of third quarter’s severe hurricane season and refinery outages in Mexico, our core business showed signs of modest improvement from third quarter’s results. 2018 is likely to be another tough year for our core business, but Aegean is amidst a transformation that we firmly believe will unlock significant value for all shareholders over time.”
Acquisition of H.E.C. Europe Limited and Related Conference Call
Earlier today the Company announced that it has entered into a definitive agreement to acquire all of the outstanding share capital of H.E.C. Europe Limited (“H.E.C.”), the parent company of Hellenic Environmental Center S.A. and a group of companies that together provide global port reception facilities services (the “HEC Group”).
Source: Aegean Marine Petroleum Network Inc.