World Fuel Services Corp. (NYSE:INT) Q2 2019 Earnings Conference Call Transcript
Jul 25, 2019 • 05:00 pm ET
Michael J. Kasbar
the favorable renegotiation of our credit facility, has significantly increased our liquidity. We now have greater financial flexibility to execute on our strategic initiatives and maintain our strength as a stable financial counterparty.
Once again, our aviation segment posted double-digit year-over-year percentage increase and operating income in the second quarter. The aviation team has done an exceptional job of improving supply chain efficiency and increasing asset utilization at our physical locations, while continuing to expand our network in response to the demand by many of our airline customers for reliable and cost-effective fuel delivery solutions.
Our government business, again, delivered strong results in Q2, demonstrating our continued ability to support complex requirements, relying on our long-established expertise in energy and logistics in geographically remote or challenging theaters of operations.
Solving energy management problems continues to drive our organic growth and differentiates us as a strategic partner fueling our customers' operations and growth. We commenced new operations at several locations in Europe and Latin America during the quarter. We continue to invest in development of customer-facing technology platforms that complement their fuel offering and facilitate our customers' trip planning and payment requirements.
Our marine segment continues to deliver strong earnings comparisons, consistent with the trend established in the first quarter of 2018. The earnings growth has primarily resulted from a heightened focus on segmenting and satisfying demand that represents greater value to the customer, concentrating on enhancing fuel supply capabilities in specific geographies where customers are experiencing supply challenges.
Following strong performance in Q1, core resale margins remain solid in Q2. We remain committed to deploying capital prudently while remaining focused on financial returns, counterparty risk exposure and cost management. Our continued focus on cost management has contributed to reduced operating expense ratios in both Q1 and Q2. We maintain a cautiously optimistic view regarding the opportunity represented by the compliance challenges facing our customers with the adoption of the IMO 2020 sulfur cap standards. Our substantial financial capability, technical capacity and extensive cross-segment supply and logistics capabilities position us exceptionally well to address our customers' requirements, leading up to and in the wake of the new regulatory environment.
During the second quarter, we launched an initiative to converge our land liquid fuels and our Kinect Energy management businesses to deliver more comprehensive and valuable set of solutions to our commercial and industrial customers. We have a tremendous opportunity to pull together our scale and breadth to globalize and grow our land business at an accelerated pace.
In addition to combining our commercial and industrial liquid fuel, gas, power and sustainability offerings, we continue to sharpen the portfolio with the objective of redeploying our financial capital and talent to our businesses that satisfy end-user demand and are simultaneously more predictable and durable.
Q2 represented the sixth consecutive quarter in which our commercial and industrial business has posted comparative organic growth. And our Kinect businesses recorded double-digit profit growth compared to the prior year, and government-related activity remains strong, offsetting the negative