‘The largest driver for the volume reduction in marine relates to our operations in Asia,’ says CFO Ira Burns.
As reported by Bunkerspot, World Fuel Services’ marine business generated a gross profit of $30.5 million in Q3 2017, a decrease of $6.8 million year over year.
The company’s marine fuel business performance in this quarter were also impacted by an ‘overall lack of volatility [which] has negatively impacted sales of price risk management offerings,’ said Chairman and CEO Michael Kasbar, speaking during an earnings call following the announcement of the company’s Q3 results.
He also noted that ‘low pricing and a lack of volatility has pushed the traditional reselling and underwriting model to a supply and transportation model, mostly notably in Singapore where the introduction of mass flow meters has accelerated this trend.’
Kasbar referenced the issues of oversupply, consolidation and changing market dynamics which continue to exert pressure on the bunker sector, and he said that: ‘Although there has been little or no overall improvement in the marine landscape, our core resale business has performed well in this challenging environment and we continue to rationalise our operating model to gain efficiencies through numerous initiatives that are ongoing throughout the company.’
Ira Burns also addressed current tough market conditions, noting that: ‘We remain focused on driving further cost efficiencies in the marine business and in identifying growth opportunities in spite of the challenging maritime environment that continues.’