US-based World Fuel Services Corp. said its first quarter marine fuel sales stood at 4.2 million mt, staying steady compared with the previous quarter but falling by 13% against Q1 of last year.
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"In addition to the pandemic-related impact, the year-over-year declines [in the marine segment] were principally driven by the strong results we saw in the first quarter of 2020, again related to the IMO transition to very low sulfur fuel oil," according to Ira Birns, executive vice president and CFO of the company, speaking on an earnings call on April 29. "You're comparing to an extraordinary Q1 when the IMO implementation happened."
Meanwhile, marine gross profit increased sequentially, relating to strong results from the company's physical operations, he said.
"As we look ahead to the second quarter for the marine segment, based on what we've experienced through the first few weeks of April, we expect marine gross profit to increase sequentially, driven by improvement in our core resale business activity," he said.
"And as we look to the latter part of the year, there's an increasing likelihood that cruise lines will begin sailing again, providing opportunities for additional improvement in the fourth quarter and into 2022," he added.
However, the number of cruise ships sailing will be nowhere close to where they were during the pre-pandemic days, he said.
The company's aviation segment volume was 1.1 billion gallons in the first quarter of 2021, essentially flat sequentially, but still well below pre-COVID-19 activity levels, it said.
Its aviation segment volume was about 1.85 billion gallons in Q1 2020.
"While cargo operations and business aviation activity remains strong, overall aviation volume remains significantly below prior-year levels, driven by continued softness in global commercial passenger aviation activity, principally given slower vaccine rollouts abroad," Birns said.
Continuing restrictions in most of Europe and Asia will likely prolong the broader recovery until vaccination rates accelerate in these regions, he said.
Historically, 70% plus of the company's aviation business would be commercial, with something close to a 50:50 split between North America and parts of the world, he said.
From the company's perspective, that type of business, which has not come back yet because of all the lockdowns and restrictions in Europe, is generally higher-margin, he said.
Also, during the same earnings call, Chairman and CEO Michael Kasbar said the company was maintaining a "cost discipline" on operations as markets reopened.
It was also undertaking sustainable initiatives and was creating lower carbon synergies for its global marine and aviation business, Kasbar said.
In addition, the company's balance sheet, including $735 million of cash, "provides it with capital to further grow our core business organically as well as the ability to capitalize on strategic investment opportunities which should drive scale and efficiencies, most specifically in our land and World Connect business activities," he added.
Headquartered in Miami, Florida, WFS is a global fuel logistics, transaction management and payment processing company, principally engaged in the distribution of fuel and related products and services in the aviation, marine and land transportation industries.