World Fuel Services Corp (INT) has reported a 39.58 percent plunge in profit for the quarter ended Mar. 31, 2017. The company has earned $31.30 million, or $0.45 a share in the quarter, compared with $51.80 million, or $0.74 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $44.50 million, or $0.64 a share compared with $62.50 million or $0.90 a share, a year ago.
Revenue during the quarter surged 57.86 percent to $8,194.30 million from $5,190.80 million in the previous year period. Gross margin for the quarter contracted 144 basis points over the previous year period to 2.82 percent. Total expenses were 99.39 percent of quarterly revenues, up from 98.82 percent for the same period last year. That has resulted in a contraction of 56 basis points in operating margin to 0.61 percent.
Operating income for the quarter was $50.30 million, compared with $61 million in the previous year period.
"In the first quarter, we witnessed continued strength in the aviation segment and closed the final phases of the ExxonMobil transaction, while remaining focused on integrating and streamlining overall operations in order to reduce operating costs and gain identified efficiencies" stated Michael J. Kasbar, chairman and chief executive officer of World Fuel Services Corporation. "We remain focused on executing our strategy of building a ubiquitous global energy management, fulfillment and payments business, while driving improved levels of profitability as the year progresses."
Operating cash flow falls marginally
World Fuel Services Corp has generated cash of $137 million from operating activities during the quarter, down 1.15 percent or $ 1.60 million, when compared with the last year period.
The company has spent $97.90 million cash to meet investing activities during the quarter as against cash outgo of $52.60 million in the last year period.
The company has spent $120.20 million cash to carry out financing activities during the quarter as against cash inflow of $19.60 million in the last year period.
Cash and cash equivalents stood at $619.30 million as on Mar. 31, 2017, down 10.21 percent or $70.40 million from $689.70 million on Mar. 31, 2016.
Working capital decreases marginally
World Fuel Services Corp has witnessed a decline in the working capital over the last year. It stood at $1,494.50 million as at Mar. 31, 2017, down 3.93 percent or $61.10 million from $1,555.60 million on Mar. 31, 2016. Current ratio was at 1.71 as on Mar. 31, 2017, down from 2 on Mar. 31, 2016.
Cash conversion cycle (CCC) has decreased to 7 days for the quarter from 14 days for the last year period. Days sales outstanding went down to 22 days for the quarter compared with 31 days for the same period last year.
Days inventory outstanding has decreased to 3 days for the quarter compared with 6 days for the previous year period. At the same time, days payable outstanding went down to 17 days for the quarter from 23 for the same period last year.
Debt increases substantially
World Fuel Services Corp has witnessed an increase in total debt over the last one year. It stood at $1,082.90 million as on Mar. 31, 2017, up 34.47 percent or $277.60 million from $805.30 million on Mar. 31, 2016. Total debt was 20.57 percent of total assets as on Mar. 31, 2017, compared with 18.22 percent on Mar. 31, 2016. Debt to equity ratio was at 0.55 as on Mar. 31, 2017, up from 0.41 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 3.96 for the quarter from 8.03 for the same period last year.
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