World Fuel Services Corp. (NYSE:INT) Q1 2018 Earnings Conference Call Transcript

Apr 26, 2018 • 05:00 pm ET


World Fuel Services Corp. (NYSE:INT) Q1 2018 Earnings Conference Call Transcript


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Q & A

Thank you. (Operator Instructions) And our first question comes from the line of Ben Nolan with Stifel. Your line is open. Please proceed with your question.

Ben Nolan

Yes. Thank you and good afternoon, guys. I wanted to follow-up with something Ira, that you had mentioned in the marine business that it seems like the first time in a long time there was an uptick in the crisis management, part of that aspect, and really is that -- I don't know, is that something you would think is -- you're continuing thus far in the quarter and are -- maybe more importantly, are you starting to see people think critically about how they're going to address their needs for the 2020 regulations and was there any preemptive hedging or anything like that that's beginning to happen that might actually be beneficial for your business?

Ira M. Birns

I'll cover the first part of your question and let Mike chime in on 2020, Ben. Thanks for the question. Look, we're certainly happy with some of the incremental results we saw coming out of the first quarter that I described in Marine. In terms of the hedging piece of the puzzle, that's a tough one. Prices are up pretty meaningfully. So more people are seem to be thinking about doing some hedging. They may not have thought about doing that for quite some time. The question is, how sustainable is what we picked up in the first quarter. It's kind of spotty. We've got a couple of more transactions with the hedge component associated with them that were nice wins for us. Whether that continues or not into the second quarter or third quarter, it's really tough to forecast.

Thus far this quarter, we're not running at the same pace we were in the -- halfway through the first quarter or a third of the way through the first quarter. So we're -- I purposely use the words cautiously optimistic because it seems like those opportunities have resurfaced a bit, how much they're going to drive incremental profitability is really a difficult one to nail down.

Michael J. Kasbar

On the -- just to add some further color to that, by and large, the marketplace believes that prices are range bound despite what we're hearing in the news. I'm hearing a lot of stuff in the news these days. Post fracking world, Saudi and Russia have got greater spare capacity, a lot of discipline there, which is incredibly surprising despite some of the talk about Iran, I don't think people seem to be worried, airlines aren't hedging. So we have the capability, and I think we are pretty sophisticated on that. We use that for our own inventory management. So we are at the ready and it's part of our offering. But it's not something that I think we are forecasting to be a big needle mover, but we are ready, if and when more volatility comes in. And some folks use that to manage their exposure more conservatively than others.