World Fuel Services Corp. (NYSE:INT) Q2 2019 Earnings Conference Call Transcript

Jul 25, 2019 • 05:00 pm ET

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World Fuel Services Corp. (NYSE:INT) Q2 2019 Earnings Conference Call Transcript

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Q & A
Operator
Operator

[Operator Instructions] And our first question comes from the line of Ben Nolan with Stifel. Your line is open. Please go ahead.

Analyst
Ben Nolan

Great. Thanks. Nice quarter, gentlemen.

Executive
Michael J. Kasbar

Thanks, Ben.

Analyst
Ben Nolan

Yes. So, I have two questions. Well, I'll stick to my one question and one follow-up. The first one relates to just sort of thinking strategically about the various businesses. Obviously, you've been able to grow -- organically grow the aviation business quite a lot. And at the same time, the volumes have been drifting down a little bit in both land and marine, but clearly, it's carving out lower margin volume in order to generate better profit out of the group, which is great. Just curious, as you think about those two businesses, in particular, going forward, is there an opportunity set to do something similar to what you have successfully been able to do in the aviation business? And that, are there business opportunities out there that you can organically grow at healthy margins in a similar cadence to the aviation? Or is that structurally not how things are going to shake out right now?

Executive
Michael J. Kasbar

Great question, Ben. And I think I've commented in the past, where I've said that our aviation business model and the manifestation of aviation and a little bit of the evolution of the entire company most notably exhibited within aviation, when our origins, as I've said in the past, we were essentially a bank. We were underwriting and reselling and basically a market maker in a fragmented market, dealing with risk management, obviously credit risk, but also price risk, and that was fantastic. It was a lot of fun, it was a great business, but things change. And we started the journey with aviation, moving from that third-party value-added reseller into inventory and then into distribution assets and then into services and technology. And that's worked out extremely well.

Marine, under John's stewardship, John Rau, and we started this in 2004 with physical supply in the UK, moved to Latin America. So that journey, it has started with marine. And marine has had a lot of challenges. We all know more than most industries got hit in a lot of different ways. But we're very much on our way there. So that, I think, is good.

And it's almost 2020. We've been sort of conservative because it's not like it's a surprise, both the -- certainly, the oil industry is pretty resilient and manages change pretty well. And the shipping industry, I think, is going to respond reasonably well to it. We feel cautiously optimistic about that. But we feel like we've got a good journey within marine, and we're on our way. Land is tremendously interesting. We started out physically within our land business and locally in terms of distribution in 2008 with our retail business and then moved into commercial and industrial business. We took a little bit of a departure into the commodity side because there were significant opportunities there, but those