Q3 2022 World Fuel Services Corp Earnings Call
The conference.
Vince will begin shortly to raise your hand during Q&A you can dial star one one.
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The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Okay.
Ladies and gentlemen, thank you for standing by and welcome to the World Fuel services third quarter 2022 earnings Conference call. My name is Victor and I will be.
Coordinating the call. This evening during the presentation, all participants will be in a listen only mode. After the Speakers' remarks, there will be a question answer session and instructions on how to ask a question will be given at the beginning of the Q&A session.
At any time.
During the conference.
As a reminder, this conference is being recorded.
Ill turn the conference over to Mr. Grant Kravitz World Fuel's, Vice President Treasurer, and Investor Relations. Mr. <unk> you may begin your conference.
Thank you Victor good evening, everyone and welcome to the World fuel services third quarter 2022 earnings Conference call, which will also be presented alongside our live slide presentation.
This call is also available via webcast to access this webcast or future webcast. Please visit the world fuel services Corporation website and click on the webcast icon.
With us on the call today are Michael Katz, our chairman and Chief Executive Officer, and IRA Burns Executive Vice President and Chief Financial Officer.
By now you should have all received a copy of our earnings release, if not you can access the release on our website.
Before we get started I would like to review World Fuel's Safe Harbor statement.
Certain statements made today, including comments about world Fuel's expectations regarding future plans and performance are forward looking statements that are subject to a range of uncertainties and risks that could cause world fuel's actual results to materially differ from the forward looking information.
A description of the risk factors that could cause results to materially differ from these projections can be found in world Fuel's. Most recent Form 10-K, and other reports filed with the Securities and Exchange Commission.
World fuel assumes no obligation to revise or publicly release the results of any revision to these forward looking statements in light of new information or future events.
Yeah.
This presentation also includes certain non-GAAP financial measures as defined in regulation G. A reconciliation.
Filiation of these non-GAAP financial measures to their most directly comparable GAAP financial measures is included in World fuels press release and can be found on our website.
We will begin with several minutes of prepared remarks, which will then be followed by a question and answer period.
With prior conference calls, we ask that members of the media and individual private investors on the line listen in listen only mode.
At this time I would like to introduce our chairman and Chief Executive Officer, Michael Caspar.
Hey, Glenn before I comment about the quarter I want to thank our global team in every part of our business and in every part of the world for the results they drive everyday for our customers suppliers partners and shareholders. We've managed through Covid, followed by supply chain disruptions and then severe inventory backward.
Asian, and still produced exceptional results and now over the past several weeks our land team responded to the energy and logistic needs of those impacted by hurricane in one of the deadliest hurricane to hit Florida since $19 35.
Thoughts go out to our neighbors, who have been impacted by this horrible storm.
Our team responded once again under difficult circumstances, which speaks volumes about the character of our logistics and supply and operations team as well as our back office team that supported the effort. Thank you for all your surface you executed thousands of deliveries in difficult conditions when it was needed most.
Responding to our customers' immediate and evolving needs remains a hallmark of who we are and what has guided what we do this drove us to establish our sustainability business well before it became a global imperative our lower than zero carbon solutions continue to grow in North and South America, Europe and Asia.
From a bigger part of our business over the next several years. Our approach has always been to drive economics in all forms of energy and digital solutions, because that's what our customers want ask us for and value with this as our guide we will continue to refine our offerings organically and through select acquisitions.
In our core conventional sustainable and digital business activities as global energy demand continues to grow and evolve.
In the third quarter, our aviation business performed extremely well aided by very strong Trans Atlantic Summer season in Europe , which continues to rebound from the pandemic as well as continued growth in business aviation demand. Our recently launched my world tampering fuel in flight optimization product.
Is the latest evidence of our focus on driving digital engagement with their customers by adding more digital and service solutions to our legacy energy and logistics offerings, while simultaneously, increasing automation and revenue generation within our ecosystem.
My World tanker and utilizes our unique position in the supply chain with experience over millions of flights and many years of data to deliver a breakthrough product that in seconds helps operators minimize overall fuel costs and multiple late flights. This is just one example of the innovation occurring between our business and technology.
<unk> teams.
Our marine business once again performed extraordinarily well managing a volatile high price environment and the associated underwriting risks.
It has been quite a run for the container dry bulk and tanker markets with strong demand across all segments. While the container sector is softening from historic highs, both tanker and dry bulk are still buoyant and crews while dealing with debt and inflation continued to experience strong demand and finally in more ways than one.
Land business achieved solid performance across the board, which IRA will now discuss in greater detail along with its usual fulsome update IRA.
Sure.
Thank you Mike Good evening everyone.
Be prepared from a fulsome update.
As Mike discussed, we really produced exceptional results for the third quarter across all of our business segments Aviation continued its rebound from the pandemic with strong year over year growth in international markets and generally strong seasonality throughout the business.
And again posted extremely strong.
<unk> and lastly, our land segment also delivered solid results on the back of strong results at Flyers combined with year over year growth across the broader land platform.
Before I review, our third quarter results. Please note that the following figures exclude the impact of non operational items highlighted in our earnings release, we actually did not have any such costs. This quarter, but we did book an adjustment of approximately $700000 after tax.
This year's third quarter restructuring costs, which we had previously accrued.
Which have not been utilized you.
You can find the breakdown of the nonoperational items, which was last year's third quarter as well as this quarters adjustment on our website at the end of today's webcast presentation.
I will get into the details in a moment, but first I would again like to summarize a few more key financial highlights.
A 30% year over year increase in average fuel prices and a 10% increase in overall volume drove consolidated revenue to $15 $7 billion in the third quarter up 88% year over year.
Bringing our year to date revenue through the third quarter to $45 billion.
<unk> again grew year over year across all three of our business segments with international commercial aviation passenger volumes in particular, continuing to rebound and land segment volumes again benefiting from the additional ratable volume associated with Flyers energy.
Adjusted third quarter net income and earnings per share were <unk> $42 million 67.
Per share respectively. This represents our highest level of quarterly earnings per share and more than two years.
And lastly, adjusted EBITDA for the third quarter was $123 million, that's an increase of $59 million or 92% compared to the third quarter of 2021.
And now the broader details.
Third quarter volume in our aviation segment was $1 8 billion gallons, that's an increase of 11% year over year year over year volume increase resulted principally from the ongoing recovery in commercial passenger activity again, particularly in international markets, which had been lagging the recovery in North America.
Overall, we are back to approximately 82% of pre pandemic volumes globally up from approximately 69% at the end of last year.
Volume in our Marine segment for the third quarter was $4 8 million metric tons, that's up slightly year over year, Drybulk and tanker markets remained strong during the third quarter, partially offset by pressure in the container markets as inflationary headwinds that posed challenges for this particular sector.
Our land segment volume was $1 5 billion gallons or gallon equivalents during the third quarter.
<unk> of 17% compared to the third quarter of last year year over year volume increase was principally driven by volume associated with the Flyers transaction, which continues to deliver solid performance as well as increased activity in world connect natural gas <unk> power activities.
Consolidated gross profit for the third quarter was $322 million, that's an increase of 63% year over year.
Our aviation segment performed extremely well during its seasonally strongest quarter generating gross profit of $130 million, that's an increase of 15% year over year and a very significant rebound from the second quarter.
As mentioned on last quarter's call our team did an outstanding job renegotiating fuel contracts during the second quarter. This minimize the impact of backwardation in the third quarter and significantly reduced such risks going forward driving greater rate ability and our aviation results.
As we begin the final stretch of 2020 to the fourth quarter will experience as traditional seasonal decline from the strong summer season in the third quarter.
Notwithstanding this normal seasonal decline full year volumes should still be up approximately 20% year over year and considering the significant impact of backwardation in the second quarter reasonably strong operating results for the full year as well.
Next the Marine segment continue to performed tremendously well in the third quarter benefiting from high bunker fuel prices continued fuel price volatility as well as the impact of inflation and interest rates, which tend to constrained broader credit availability in the market.
This resulted in quarterly gross profit of $75 million, that's nearly three five times the amount of gross profit generated in the prior year.
The Marine team continues to do an outstanding job optimizing the volatile and credit constrained marketplace, while continuing to manage working capital and a related risks with excellence.
As we look ahead to the fourth quarter with bunker fuel prices down approximately 30% for average prices during the second and third quarters. The fourth quarter is currently not expected to be quite as strong as the third quarter. However, we expect Marines fourth quarter results to again significantly exceed the prior year.
And lastly, our land segment delivered gross profit of $118 million in the third quarter, that's up 88% year over year, principally as a result of the Flyers acquisition as well as improved year over year results across the land platform, including World connect as.
As we look ahead to the fourth quarter with Flyers seasonal strength in the third quarter now being part of the equation, while we expect fourth quarter operating results to experience a seasonal uptick in the U K overall.
Overall land operating results are only expected to increase modestly from the third quarter. However year over year results will obviously remain significantly higher principally related to Flyers.
Core operating expenses were $221 million in the third quarter. This represents.
Dent a significant year over year increase principally related to increased cash and equity based incentive compensation related in part to the record level of quarterly gross profit delivered in the third quarter compared to the third quarter of 2021, when variable compensation was down significantly driven by the ongoing impacts of the pandemic last year.
<unk>.
The year over year variance was also impacted by the operating expenses associated with Flyers energy that obviously were not in our numbers in 2021.
Despite the operating expense increase considering the very strong gross profit contribution this year, our operating margin as a percentage of gross profit actually increased significantly both sequentially and year over year in the third quarter to the highest level we've seen since the pandemic began.
Looking ahead to the fourth quarter with the expected decline in gross profit related to seasonality and lower fuel prices. We expect core operating expenses to fall back to the range more consistent with the second quarter of this year somewhere between 198 and $204 million. However, our quarterly operating margin.
Should remain well ahead of the prior year once again.
Bad debt expense in the third quarter was $1 $4 million, our credit and collections teams continue to manage our accounts receivable portfolio are remarkably well during a period of continued economic uncertainty.
Adjusted EBITDA as I mentioned earlier was a record $123 million in the third quarter, representing an increase of 92% year over year.
Trailing 12 months adjusted EBITDA is now $329 million, that's up nearly 50% year over year.
Benefiting principally from the addition of Flyers and a significant increase in profitability in our marine segment in 2022.
Our interest expense increased to $34 million in the third quarter principally related to the sharp rise in interest rates were short term borrowing rates increased by approximately one 5% during the third quarter.
With a further rate hike expected next week, we expect our fourth quarter interest expense to be somewhat higher than the third quarter. Despite continued efforts to optimize working capital and borrowing levels and look for as many ways as possible to reduce our interest expense going forward.
Our tax effective tax rate for the third quarter was 32% flat with the prior year's third quarter and flat with our expectations for the fourth quarter.
Active tax rate for the full year is now expected to be somewhere between 21, and 23% which is down from 26% in 2021.
We generated $259 million of operating cash flow in the third quarter, driven principally by lower fuel prices, which declined approximately 15% from the second quarter and record adjusted EBITDA generated during the quarter.
This contributed to a reduction in our net debt position of just under $430 million further strengthening our balance sheet and liquidity profile.
Simply put we delivered phenomenal results across the business in the third quarter. Despite the macroeconomic challenges that prevail.
<unk> continued to rebound from the pandemic and has recovered nicely from the backwardation impact in the second quarter.
<unk> delivered another solid quarter, very solid quarter and land performed well across the business.
On the back of record gross profit and solid cash flow. Our operating margin was strong at our quarterly return on invested capital exceeded 10% for the first time since 2019.
While we will experience a sequential seasonal decline in the fourth quarter from our record gross profit performance in the third quarter.
Our full year results will reflect a significant recovery for 2021.
Our team worked very hard through unprecedented circumstances during 2020 one to ensure we were well prepared to execute for our customers and suppliers who depend on us as markets recovered in 2022 is a testament to such efforts.
Also our balance sheet liquidity profile is further strengthened providing us with significant liquidity to support organic growth and fund acquisition opportunities in our core fuels business, where many higher margin higher return opportunities still remain as well as invest in the world connect at our growing suite of.
<unk> and services that support our customers and their energy transition journey. Thank.
Thank you very much I'd like to now turn the call back to our operator Victor for Q&A.
Thank you.
Yeah.
And at this time I would like to remind everyone. If you'd like to ask a question. Please press star.
Our key followed by the number one one on your telephone keypad.
We'll hear a <unk> pump technology requests if you are using a speaker phone. Please lift your handset before entering your request, we will pause for just a moment to compile the Q&A roster.
And our first question comes from the line of Ken <unk> from Bank of America. Your line is open.
Okay.
Sorry, Hey, it's Ken Nextera I think the operator went blank there, but I think you called that makes that just bank of America.
IRA.
Good afternoon, Mike and IRA.
So you talked a bit about the fuel price decline and what impact that's going to have on results maybe talk about economic activity as well right now how should we start thinking about this or have you already started to see it on each of the segments, maybe just run through in Marine aviation and land in terms of the impact you've seen in historic downturn.
Well look as we said in the past you have a lot of contract business in aviation Thats generally.
Sure.
Full year in duration, obviously renegotiated some of that related to backwardation in Q2, we have some longer term contracts and parts of land and marine business is the one where you see the most movement.
As fuel prices moved significantly upward and downward right. We saw a significant increase in margins as price prices marched up and while it may not happen overnight as prices decline.
You clearly would expect that those margins would come back down to more normalized levels.
So.
And effectively what are you seeing a bit of that tailwind.
Tail end of Q3 into early Q4 as I mentioned in my prepared remarks remarks.
Marines.
Marines.
Fuel prices.
We're down probably 30% from where they were in Q2 and Q3 on average.
So thats where we.
We would see it the most.
And of course, the jury's out on the aviation side in terms of.
But.
What the economy, maybe maybe moving towards from a recessionary standpoint, what that could mean for air travel, but we've seen so far is air travel has remained not only very strong I'm not sure. The last time, you traveled Canada airplane tickets is still really expensive so.
They are not begging people to show up and take seats. So we're seeing a lot of strength, we saw unbelievable strength in the European markets over the summer.
We will see very soon whether we're going to have another really strong holiday season in Europe as we did last year.
Of course, the U S as well.
And.
In the land business.
To finish off the segments in relation to your question.
Yes.
We are.
We're seeing nothing in particular that I would say the needle is moving.
The wrong direction.
Business remains sound, we've seen year over year growth.
The Flyers business continues to.
Chug, along really well our retail business.
Business, we're delivering fuel to 2000, plus C stores around the country is doing pretty well.
So overall the biggest move of note.
It really relates to.
The.
The marine the marine margin.
The other thing to note is as as prices do come down.
That obviously reduces our working capital requirements and that working capital costs more today in today's.
The highest rates we've seen a very long time, so if prices come down.
We can give something up on margin, but hopefully we'll be able to reduce interest expense as well not necessarily dollar for dollar, but there is there is a bit of a correlation there.
Okay.
I don't know if its Steve I guess my follow up just it looks like you had a big.
Down in accounts receivable is that I know your bad debt expense phenomenally low at just over $1 million, but is that shrinking the payment terms in terms of a shifting economy to bring down that the terms that maybe you could talk about if those have changed at all.
As we get maybe get into a slower economy.
No it's not that really hit it if you remember what I said earlier prices are down, let's say around 15% 16%.
As compared to the second quarter, we were at about $4 billion. In Q2, you take 15% off of that Youre not that far from where we wound up.
At the end of the third quarter, we did a little better we brought our trade cycle down a little bit.
We always try to manage our working capital as efficiently as possible.
But when your interest rate increases by 10 to 20 basis points every week.
Focusing on that even more so the team did a great job.
On the collection side on the payable side and on the inventory side too.
To make sure that our working capital.
<unk>.
It was low as it could be because it's obviously costing us a lot more money than it did a year ago from an interest expense standpoint, our net working capital.
I define it dropped about $260 million quarter over quarter.
So work hard too.
To keep that number as low as possible and.
And thereby keep our debt lower our interest expense as low as possible.
If you have any more questions Ken.
Feel free to ask another one.
As my two I just wanted to clarify you said that the operating expenses went from <unk> to 'twenty. One what was your number I just didnt catch the number for the fourth quarter.
198 to two of course, so it should come back down.
In Q4, yes, I just want to clarify that thanks IRA Thanks, Michael.
At that time.
Thanks, Jeff.
Victor.
Okay.
Okay.
And once again Thats Star one one for a question Star 101.
One moment.
And with the cash why are there no further questions at this time I will now turn the call back to you.
I think we may have.
Yes, we had one person trying to download and aegis was interpreting the instructions.
Let's give you another minute.
Nolan from Stiefel.
Not a problem.
On the hold music.
Jeopardy news.
Yes.
With Barclays.
Thank you.
Weddings.
So yes, no we were very.
We're excited to tell you about our my tanker ing.
Fuel and in flight optimization Act so that.
Helps pilots with their flight plans.
Fuel optimization of whether airport look up the used to carry big flight bag and now they've got.
I pad.
Very convenient they can look at.
Six airports in six seconds and figure out their optimization, it's part of our family of my World applications.
So I'm pretty excited about that.
It's just sort of a continuing delivery of more products into the marketplace. So we will continue to report out to you on those as they.
As they materialize and is more in the pipeline.
So.
That's a big part as I made in my comments.
Continuing to provide more value make it easier for our customers and our suppliers to transact business.
And figure out how to manage their operations.
Yes.
Victor do we have been in the queue.
There are no sign of event.
Okay.
Alright.
Is that he is on his way.
Okay.
So I know that in the news there has been.
A lot of talk about shortage of diesel, particularly on the east coast.
One of the things that.
As a benefit and I think that was.
Manifested exhibited within our ability to respond to some of the shortages and some of the spikes in demand in terms of moving product around the country.
Having our own distribution assets and strong network of partners enables enables us to respond to those types of searches with burst capacity.
Okay.
What are you going to.
We got to get we got them in.
It's not them, but we.
Do have one person in the queue to ask questions.
At Leerink Nikitas from Bloomberg Your line is open.
Got it.
Yes.
Can you hear me this is Ben.
Yes.
Yes.
Having two <unk>.
Dial in remotely things don't think well with my calendar so.
The nature of the base these days I guess.
I do have a few questions and I appreciate you kind of hanging out.
Chatting in.
It out.
Yes.
The first one is as it relates to obviously the gross numbers are fantastic but.
IRA you talked a little bit about the interest expense.
Taxes were quite a bit higher than we were last quarter, just trying to get at and I know you mentioned the tax rate should be similar for the fourth quarter, but.
First on tax.
<unk>.
What's sort of the culprit for the higher rate relative to what we had seen in the first half of the year and how do you see that playing out.
Next year and then on the interest expense, obviously interest rates are rising but.
Is there anything that you can do other than I guess, just paying down debt to help mitigate that at all maybe a little bit less factoring or.
Anything that can.
Help too.
Hope that interest expense line a little bit.
Yes, well I'll cover the taxes first let me get to interest so on the tax side, a couple of things come to mind, which.
Werent necessarily in our mindset on the earlier parts of the year of course in the second quarter, we had the impact of backwardation, we knew that in Q2, but we had some we had some offsets to that and now you have the significant increase in interest expense both both of those items are.
In the U S rates of both of those items affect our domestic <unk>.
Income.
And the marine.
Phenomenal performance is principally offshore so you had a pretty significant shift in the distribution of earnings.
For 2022, compared to where we would have planned and forecast at the beginning of the year.
And that that clearly just because of the way the wonderful tax code works.
It has an impact on our tax rate if you look out to next year.
By the way, even though we're at 30% this quarter, we're probably going to say ballpark in Q4, our rate for the year will still only be 'twenty, two 'twenty, 3%, which is still much better than they were a few hundred basis points better than where we were last year I would say when you look to next year, we don't expect to have a massive backwardation.
<unk> impact the interest piece is a question that dovetails into your next question, but we hope.
The rate will be a few hundred basis points lower.
And then where were coming out in the second half of the year next year so call. It <unk>.
<unk>, 6798% ish.
So.
Going to interests, which affect stat analysis that I just described.
Yes, we're obviously like any other company.
That has debt on their balance sheet and relies on short term funding whether it be the receivables program or our bank lines.
Everyone is facing similar issues and trying to find.
Find ways to mitigate.
The rising cost of interest and.
Glenn who.
Obviously insurance the call, but it is also our treasurer him and his team work closely together with myself and many other people to identify.
All areas.
Our capital structure or anything related to that that habit I have opportunities to have a positive impact on the interest line.
Be getting more.
More interest for the money that we do have on hand around the world could be reducing.
Factoring a bit or it could be the strategic use of <unk>.
What is a credit to reduce some cash going out the door, there's lots of things that we're focused on.
Day to day.
And Lynn.
Dozens of.
Of areas that we're focused on but again.
Every win in that department points up getting offset by another 75 basis points.
Movement by the fed, but getting we worked really hard in Q3 generated over $250 million of operating cash flow.
How do we got done that our interest expense would have been even higher.
Don't anticipate that we will generate nearly that much cash in the fourth quarter, but again, we are focused on a bunch of initiatives to keep our level of interest expense in the same neighborhood and try to start bringing it down next year depending upon.
What's happening with the economy, and what what direction that fed may continue to take or not.
In 2023, so something we're very focused on the good news is.
Theres, a pretty reasonably tight correlation between the tremendous success, we had in marine.
And the fact that we.
We're experiencing higher higher interest costs and the net.
Net of those two.
Still produced a really nice result for us this quarter, but we.
We don't necessarily want to be spending $34 million in interest every quarter. So we will do everything we can to manage that number is as best possible.
Great.
Given sort of where interest costs are all in.
Short term long term receivables et cetera is.
From your perspective, right now is sort of the highest and best use of the cash flow that you're generating to sort of.
Keep it in the business keep from having to borrow in order to fund the business I mean is that.
Is that.
How youre thinking about what to do with the cash flow that you're generating demand.
Look across the business, it's a daily education process, because there's a lot of people that are out there working really are trying to generate revenue for us that probably having spent a lot of time in their career and in the high single digit interest rate environment right. So.
We're trying to make sure all of the business, we're doing makes sense that we're getting.
Boarded at.
At the level, we think we should be in the interest environment like this.
So.
We will obviously keep investing in the business, where it makes sense, where we believe we can get returns well above that short term cost of capital. There are there are.
Thank you were hinting at this so I'll answer part two there is still a lot of strategic opportunities for us that currently have a higher cost of capital associated with them that they did when they did last year. So it's a little more difficult to find the right answers there and get the return that we're comfortable with but there will be opportunities.
Right.
The interest rate environment that we're in to.
To supplement our organic growth over the next 12 to 18 months with with some additional.
Additional strategic investments right.
Alright.
The other part of that too is services.
Business is that don't have large working capital requirements and we've developed some of those ourselves we've acquired some so that's very much a part of the mix.
Within our traditional legacy commodity business, so did commoditizing, the commodity and basically wrapping a lot of services that customers are asking for and we're providing an <unk>.
Yes.
Very salutary to the overall.
Offerings of the company.
Right.
I appreciate it and then lastly, just bigger picture.
Again, appreciating that it's a little probably early to look too far out into 2023, but to the extent that you can.
And.
Is there anything that.
Outside maybe of a really challenging macroeconomic environment is there anything that you guys are seeing that should.
And it causes you to think that there might be any change in the momentum that we're seeing at the moment.
Obviously energy prices are going to move around a little bit and youre going to have a seasonal shifts or whatever but from a from a broad perspective do you feel like the momentum that you have at the moment can be sustained.
Over the course of the next year.
Well, if you break it into a few piece so I think the answer is.
Yes, depending on how you define momentum.
And remember aviation took it on the Chin.
Pretty pretty heavily in the first half of the year.
If we agree that we don't expect that to happen again, there is significant upside for aviation next year even in a.
Even if it was a low growth environment, depending upon what's going on in the economy, just because we're not expecting to take $50 million plus hit again.
In the second quarter of next year or any quarter of next year.
Marine is a question that right because it really depends on what happens with prices right.
Marine will likely continue to perform.
Well ahead of where they performed in 2021.
But in order to match their performance in 'twenty two.
You are most likely going to need prices to remain relatively high but it won't be as easy to two to hit those same numbers in a lower price environment, but again prices go down we generate more cash pay down debt and we get some relief as I said earlier on the interest line and I think Landlock, we're just getting so getting no flyers, we're nine months in.
We're learning a lot.
We can drive more efficiencies across the fuels part of the land business. So I think.
We're actually really just gaining momentum there in a serious way and we're also just gaining momentum in our connect business on the on the sustainability side, whether it be renewable fuels of the various product and service offerings that.
We keep growing.
That part of the business is there is a tremendous interest from our customers for assistance in that regard.
So I think land certainly as the.
The opportunity for an uptick in momentum aviation certainly marine is the question Mark again, just because it'll all depend so heavily on price.
So overall, we're looking to grow next year.
Interest may get in our way a little bit, but we're working hard to get to mitigate that.
Line item in the P&L.
Alright.
Just just additional color, obviously presence in aviation and marine.
The ability to.
Different dynamics as IRA described within both of those businesses and then growth in market share on land as connect we still have very small market share in those businesses. So those are areas that.
We definitely have a pretty good runway and certainly has demonstrated within aviation our ability to fill out the offering and continue to add to the offering I think is pretty impressive and I think there is opportunities to do that in marine as well.
But certainly there is a pretty good runway within land in connect and we do want to continue to bring in more digital offerings into the marketplace. So I think that obviously running the business and looking at price and interest and some of it depending on who you are.
Talk to you.
<unk>.
Things are going to look a little bit rough, but I think certainly as I think I've said.
Last quarter or previous.
With what we've gone through in this company.
Let's see if we can elaborate a recession, but we've certainly demonstrated that we are built for turbulence.
We've got the resilience.
In this business and you've got a hell of a lot of grit gotten organization.
That's got a burning desire to succeed and provide value. So I think we're sort of entering a phase here where.
You've got a better portfolio, you've got sort of increased quality of earnings obviously, a number of different things in front of us but.
A far better positioned company.
Alright.
I appreciate the answers and again sorry for the Mcgregor.
Anything else Ben do you want to talk about.
Thank you.
Maybe Paul but.
Sorry.
Well I'll talk about that.
Great. Thanks, very much I appreciate it alright.
Sure.
Thank you Mr. <unk> there are no further questions at this time I would welcome. Thank you. Thank you operator appreciate that and thank you to everyone who is listening. We appreciate the support we enjoy what we do.
Thank you to all of my colleagues around the world.
We appreciate and enjoy working with you and look forward to talking to everybody next quarter, So stay well stay safe and talk to you soon.
Ladies and gentlemen that does conclude the conference call for today, we thank you for your participation and ask you. Please disconnect your line.
Have a great day.
The conference will begin shortly to raise your hand during Q&A you can dial star one one.
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Okay.
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Okay.