- Volumes Climb to Highest Since IMO 2020 by Ship & Bunker News Team The company’s bunker profit margins have been declining steadily since the IMO 2020 high.
- World Fuel Services is the world’s second-largest marine fuels firm after Bunker Holding.
- Ira Birns, chief financial officer at WFS, also struck an optimistic note on the call.
In the third quarter, World Fuel Services’ bunker margins fell on a yearly and sequential quarterly basis, while its volumes increased to their greatest level since the IMO 2020 transition’s anomalous market conditions as reported by Ship & Bunker.
Marine Sector in Profit
In the third quarter of 2021, the firm reported a net profit of $3.6 million from its marine sector, down 56% from $8.2 million a year earlier and 25% from $4.8 million in the second quarter of this year, according to quarterly figures announced late Thursday.
Bunker sales volume increased 9.3% year over year and 3.9 percent quarter over quarter to 4.8 million mt, the highest level since the first quarter of 2020.
This resulted in a bunker margin of $0.76/mt, down from $1.88/mt a year ago. Over the last five years, the company’s average bunker margin was $2.03/mt, excluding Q4 2017, when a substantial one-time impairment skewed the figure.
After Bunker Holding, World Fuel Services is the world’s second-largest maritime fuels company.
Higher Fuel Costs
“Market conditions in the marine sector were severe in the third quarter, aggravated by the fact that we did not profit from a certain seasonal business that we had generated in previous years,” CEO Michael Kasbar said on a conference call with investors on Thursday.
“However, we are beginning to see improvements in certain industries, such as the cruise industry, where activity is continuing to recover with more ships sailing monthly.”
On the call, WFS’s chief financial officer, Ira Birns, also sounded upbeat.
“While supply chain bottlenecks at particular ports may cause some inconvenience, the marine activity could benefit from the ongoing economic recovery and may be higher fuel costs as we approach into 2022,” he said.
“As we look ahead to the fourth quarter, we expect marine gross profit to improve marginally both sequentially and year-over-year, owing to certain indicators of better market conditions in our core business,” says the company.
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Source: Ship & Bunker
