Key Financial Results
Second Quarter of 2020 compared to the Second Quarter of 2019 Earnings by product sales Six months ended June 30, Net sales volumes per product 2020 2019 Crude Oil Sales$ 749,200 $ 1,917,178 Gas Oil Sales 622,000 300,000 Lubricants Sales 143,501 - Hires & Freights Sales 218,000 298,500 Other Revenues / Discounts 34,080 11,000 Totals$ 1,766,781 $ 2,526,678
Net loss attributable to
Refer to the "Results of Operations" section beginning on page 14 for a discussion of our financial results.
Executive Overview
Business Environment and Outlook
Our midstream segment relies and depends on our crude oil sales contracts to keep our vessels employed. We rely primarily on the revenues generated from our business of physical supply of crude oil and marketing of refined products to our end customers.
The company continually evaluates opportunities to dispose of assets that are not expected to provide sufficient long-term value or to acquire assets or operations complementary to its asset base to help augment the company's financial performance and value growth. Asset dispositions and restructurings may result in significant gains or losses in future periods. The company continually evaluates opportunities to dispose of assets that are not expected to provide sufficient long-term value or to acquire assets or operations complementary to its asset base to help augment the company's financial performance and value growth. Asset dispositions and restructurings may result in significant gains or losses in future periods.
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Response to Market Conditions and COVID-19
During the second quarter of 2020, travel restrictions and other constraints on
economic activity were implemented in many locations around the world to limit
the spread of the COVID-19 virus. As a result, demand for our products has
fallen steeply and commodity prices, including crude oil and other petroleum
products, have followed suit. The drop in commodity prices is expected to
negatively impact the company's future financial and operating results. Due to
the rapidly changing environment, there continues to be uncertainty and
unpredictability around the impact of the COVID-19 pandemic on our results,
which could be material.
Refer to the "Cautionary Statements Relevant to Forward-Looking Information" on Page 3 and to "Risk Factors" in Part II, Item 1A, on page 19 for a discussion of some of the inherent risks that could materially impact the company's results of operations or financial condition.
Operating sectors
Our business operates in the downstream and midstream sectors of the energy
industry, where we acquire and supply crude oil, and engage in the refining and
marketing of refined products and lubricants. As a supplier, we procure crude
oil from our direct sources and deliver by our tankers fleet to buyers'
destinations. With service centers in East Mediterranean and
We provide our customers with services that require sophisticated logistical operations designed to meet their strict oil quality and delivery scheduling needs. We believe that our extensive experience and management systems allow us to meet our customers' specific requirements when they purchase and take delivery of crude oil, refined products and lubricants around the areas in which we operate. We have devoted our efforts to building a global brand and believe that our customers recognize our brand as representing high quality service and products at each of our locations. We also perform our technical ship operations in-house, which helps us maintain high levels of customer service. Throughout our history, we have expanded our business capabilities through strategic alliances, select business and vessel acquisitions, and the establishment of new service centers.
The company maintain its principal marketing and operating offices at 1, Akti
Xaveriou, 18538 Piraeus,
Other Businesses
Effected as on
Our key business segments
The following are descriptions of our recent initiatives undertaken in each of our key business segments:
Upstream; Earnings for the upstream segment are closely aligned with industry
prices for crude oil. Crude oil prices are subject to external factors over
which the company has no control, including product demand connected with global
economic conditions, industry production and inventory levels, technology
advancements, production quotas or other actions imposed by the
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Downstream: As on
Earnings for the downstream segment are closely tied to margins on the refining, manufacturing and marketing of products that include gasoline, diesel, fuel oil and lubricants additives, and petrochemicals. Industry margins are sometimes volatile and can be affected by the global and regional supply-and-demand balance for refined products and petrochemicals, and by changes in the price of crude oil, other refinery and petrochemical feedstocks. Industry margins can also be influenced by inventory levels, geopolitical events, costs of materials and services, refinery or chemical plant capacity utilization, maintenance programs, and disruptions at refineries resulting from unplanned outages due to severe weather, fires or other operational events. Other factors affecting profitability for downstream operations include the reliability and efficiency of the company's refining, marketing, the effectiveness of its crude oil supply functions, and the volatility of tanker-charter rates for the company's shipping operations, which are driven by the industry's demand for crude oil and product tankers. Other factors beyond the company's control include the general level of inflation and energy costs to operate the company's refining process and marketing, including the changes in tax laws and regulations.
The company's most significant marketing areas are the
Midstream; The outbreak of COVID-19 pandemic occurred the ceased of our entire
fleet operations and employments which resulted the complete elimination of
freight and hire incomes, while the fleet expenses remained on the same levels
during and March, April and
The company closely monitors developments in the financial and credit markets, the level of worldwide economic activity, and the implications for the Company of movements in prices for crude oil and refined products. Management takes these developments into account in the conduct of daily operations and for business planning.
The company continually evaluates opportunities to dispose of assets that are not expected to provide sufficient long-term value or to acquire assets or operations complementary to its asset base to help augment the company's financial performance and value growth. Asset dispositions and restructurings may result in significant gains or losses in future periods.
Results of Operations
The following section presents the results of operations and variances on a before-tax basis for the company's business operations, as well as for "All Other."
Our operating revenues are driven primarily of the commodities trading sales and our tankers fleet employment days during which our vessels are generating revenues, while our financial results are subject to a number of sectors and reflects to the following factors:
Cost of commodities; is the cost we purchase the oil products -mainly the crude oil- and such cost is based either on Brent Index prices or Fixed price, the quality and quantity of the product.
Commodities Operating Expenses; relates to products surveys before and after the shipment, bunkers supplied to the employment vessel, cargoes surveys, loading/unloading expenses, agency and representative services.
Shipping & Logistic Expenses; includes the sea freight and mobilization cost, the performed loading and discharging of the product, and any expenses occurred during the shipping time from the loading point up to unloading facilities.
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Vessels Operating Expenses; includes crew wages and bonuses, their medical support and travelling, maintenance and repairs to the vessels hull and their machineries, expenses for supplies of spare-parts and consumable stores, paints, lubricants, fresh water, bunkers, agency services, etc.
General and Administrative Expenses; relates to our directors, officers and
managers salaries and compensations, shore staff wages, employee's federal
insurance, offices lease and utilities, telecommunications, travelling and
representations of our officers, our agency fees we pay to our branch's offices
in
Corporate Expenses; are all company's expenses and includes, our executive's compensations, attorney's fee, Auditors and accountant fees, Consultant's and P/R fees, Transfer agents of our stock, miscellaneous.
Other factors may affect our Results of Operations; In addition to the said
expenses there are factors beyond of our control which may affect seriously our
operations results. Inasmuch as we trade also
EBITDA and Adjustment; EBITDA represents net income before expenses, taxes and depreciation. Adjusted EBITDA represents net income before expense, taxes, taxes, depreciation and amortization of dry-docking.
Six months endedJune 30, 2020 2019
Operating Earnings / (losses)
Operating losses of during the second quarter of 2020 amount to
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