Aegean Marine on Continued Growth Path

Aegean Marine Petroleum Network Inc. (ANW) has been a public company for 7 quarters now and its growth track has been steadily progressing. The 3rd quarter results just released were no exception. Aegean Marine is building a worldwide network of ship refueling facilities and the bunker tankers that provide fuel to ocean going vessels. It has expanded into 12 ports and currently has approximately 30 bunker tankers, and is on its way to 52 by the end of 2010.

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To track its growth the company reports the total amount of bunker fuel sold and the gross spread per metric ton. For the 3rd quarter the company sold 1.34 million metric tons, up 49% from Q3, 2008 and 8.6% higher than Q2, 2008. The gross spread per ton in the 3rd quarter was $32.75, up 32% from 2007.

From comments expressed on the conference call, management will be happy if the gross spread stays in the high $20s or better. Net income per share also increased to 25¢ for the quarter compared to 17¢ a year earlier, a 47% gain.

The growth factors that ANW is building on are still in play. The worldwide number of bunker tankers is rapidly shrinking as single hull models are forced out of service by regulation much faster than new double hull ships can be built. The industry is ripe for consolidation as many smaller players are having trouble obtaining working capital in the current financial environment.

ANW is now the largest bunker fleet in the world with 29 tankers out of a worldwide total of over 1,600 (down from 3,500 at the start of 2007). Besides continuing to increase the size of its fleet, ANW has significant upside potential from the current utilization average of 550 metric tons/vessel/day. Its U.A.E. facility has had quarters with almost 1,000 ton per day utilization.

As was pointed out in the conference call, ships need the same amount of fuel no matter how much they are earning. Aegean Marine is building a worldwide network to provide fuel to all kinds of ships from tankers to dry bulk to cruise ships. A year ago this stock was over $40 based on its growth prospects. The growth has continued and the prospects are even stronger.

Disclosure: ANW is a component of my site’s hypothetical Opportunities Portfolio.