Aegean Marine Petroleum Network Inc. (ANW)

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Aegean Marine Petroleum Network Inc. (ANW)

Q3 2012 Earnings Conference Call

November 15, 2012 8:30 am ET


Peter C. Georgiopoulos – Chairman

E. Nikolas Tavlarios – President, Principal Executive Officer

Spyros Gianniotis – Chief Financial Officer


Douglas Mavrinac – Jefferies & Company, Inc.

Ben Nolan – Knight Capital

Kevin Sterling – BB&T Capital Markets

Chris Snyder – Sidoti & Co.



Good morning, and welcome to the Aegean Marine Petroleum Network Inc. Third Quarter 2012 Conference Call Presentation. I would like to advise everyone that there will be a slide presentation accompanying today’s conference call. That presentation can be obtained from Aegean’s website at

I also want to inform everyone that today’s conference is being recorded and is now being webcast at the Company’s website We will conduct a question-and-answer session after the opening remarks and instructions will follow at that time. A replay of the conference will be accessible through the next two weeks by dialing 888-203-1112 for U.S. callers and 719-457-0820 for those outside the U.S. To access the replay, please enter the pass code 8476067.

At this time, I would like to turn the conference over to the Company. Please go ahead.

Spyros Gianniotis

Thank you, and welcome everyone to Aegean Marine’s third quarter 2012 conference call. My name is Spyros Gianniotis Aegean’s Chief Financial Officer. With me today is Peter Georgiopoulos, Chairman of Aegean, as well as Nick Tavlarios Aegean’s President

Before we begin our presentation, I would like to note that this conference call will contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Words such as expects, anticipates, intends, estimates, or similar expressions are intended to identify these forward-looking statements. These statements are based on Aegean Marine Petroleum Network Inc’s current plans and expectations and involve risks and uncertainties that could cause future activities and results of operations to be materially different from those set forth in the forward-looking statements.

Important factors that could cause actual results to differ include our future operating or financial results, our ability to manage growth adverse conditions in the marine field supply industries, and increased levels of competition. For further information, please refer to Aegean Marine Petroleum Network, Inc’s reports and filings with the Securities and Exchange Commission.

As outlined on page four of the presentation, Nick will provide our recent highlights. I will then review our financial results and Nick will review our Company strategy. After that, we will open the floor to questions.

I will now turn the call over to Nick.

E. Nikolas Tavlarios

Thank you, Spyros and good morning everyone. During the third quarter, management continued to achieve steady progress enhancing the company’s profitability in a difficult macro environment as net income on an adjusted basis has increased each quarter-to-date in 2012.

Consisting with our goals to strengthen Aegean’s integrated marine fuel logistics chain, we launched physical supply operations and commenced onshore storage operations in Hong Kong and Tanger-Med respectively. We also increased utilization and reduced operating expenses for the second consecutive quarter.

While overall market conditions remain challenging, we believe our best and scalable network for the global supply marine fuel, combined with the strong financial platform, both well for Aegean to continue to capitalize on the positive demand for its comprehensive services and drive future earnings growth.

I will now begin my discussion on slide 6 of the presentation. During the three months ended September 30, 2012, sales volumes increased slightly to 2,716,388 metric tons. Spyros will provide more details regarding our financial results. I would like to know that based on ongoing implementation of our strategy and that enhancing profitability, gross profit increased to $74.4 million in Q3.

For the three months ended September 30, 2012, we reported our operating income of $15.1 million and EBITDA of $24.6 million, year-to-date EBITDA as increased 36.5% to $68.1 million as compared to $49.9 million for the nine months ended September 30, 2011.

Net income for the quarter was $8 million or $0.17 basic and diluted earnings per share. This compares adjusted net income of $5.3 million or 11 basic and diluted earnings per share for the third quarter of 2011, representing an increase to more than 50%.

We are pleased by the notable improvement in our finance results, despite the challenging market environment, we remain focus on strengthening Aegean’s leading industry brand and leveraging the company’s global marine fuel platform.

During the third quarter, we commenced physical supply operations in Hong Kong, one of the large container ports in a world that serves as economic gateway to mainland China. We also announced expansion plans in Barcelona, which will increase our global presence in 21 markets, covering approximately 60 ports, as compared to five service centres at this time of our IPO December 2006.

In terms of the performance on our market since third quarter, sales volumes in Greece increased on sequential basis due to strong overall ship traffic, which is partially attributable to the summer crude season. As a reminder, we have not been affected by the turmoil in Greece, which represents approximately by 5% of our total sales volume. Nor do we have any exposure to Greek financial markets.

Gibraltar also registered a positive growth rate during the third quarter as in West Africa and Panama. In Tanger-Med, third quarter sales volume were essentially flat as compared to the previous quarter. We commenced utilization of a new onshore storage facility totaling 218,000 cubic meters during the third quarter and expect this new facility, we will maintain exclusive storage and buffering rights to support future growth in distractive market.

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