Q1 2023 World Fuel Services Corporation Earnings Call
Ladies and gentlemen, thank you for standing by and welcome to the World Fuel services first quarter 2023 earnings Conference call. My name is Gigi and I'll 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 and answer session and instructions on how to ask a question it will be given at the beginning of the Q&A session.
As a reminder, this conference is being recorded I would now like to turn the conference over to Mr. Glenn <unk> World Fuel's, Vice President Treasurer, and Investor Relations. Mr Club. It you may begin your conference.
Thank you Gigi good evening, everyone and welcome to the World fuel services first quarter 2023 earnings conference call, which will be presented alongside our live slide presentation.
Today's presentation 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 Kass Bar, 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.
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 revisions to these forward looking statements in light of new information or future events.
This presentation also includes certain non-GAAP financial measures as defined in regulation G. A reconciliation 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 its website.
We will begin with several minutes of prepared remarks, which will then be followed by a question and answer period.
Prior conference calls, we ask that members of the media and individual private investors on the line participate in listen only mode.
At this time I would like to introduce our chairman and Chief Executive Officer, Michael Kasper. Thank.
Thank you Glenn and good afternoon, everyone. We appreciate you joining us today.
The first quarter of 2023 saw a continuation of the many trends that made last year a successful one for our business. Our aviation business benefited from increased international airline passenger demand as many parts of the world were still experiencing pandemic related travel restrictions, which did not fully ease into the <unk>.
Latter part of the year.
Aviation has also benefited from the inventory risk mitigation efforts, we implemented in response to the extreme price volatility experienced in 2022, which negatively impacted our aviation results through the first half of last year.
We experienced continued growth of our diversified business and general aviation offerings, including products and services ancillary to our core fuel supply such as trip support services in de icing fluid, which also contributed meaningfully to the year over year increase in aviation profitability.
Many of the services and digital offerings, we provide to these customers form integral parts of a broader aviation ecosystem that connects us intimately with our customer base. This connectivity has proven to be more resilient to short term economic weakness than traditional fuel cells, which is why our investment and expansion of these lines of business.
Over the past several years has been a primary strategic focus.
Looking forward. This is a key underpinning of our digital growth strategy, we believe that by expanding our portfolio of digital offerings across all of our businesses, we cannot only engage more deeply with our customers, but also improve the readability of our revenue sources and reduce the capital intensity of our operators to deliver enhanced returns.
We are also focused on implementing advanced technologies to integrate our processes and make us easier to do business with further enabling us to be the counterparty of choice in the markets we serve.
On previous calls I have emphasized our efforts over the last several years to sharpen our portfolio and maximize returns which resulted in the reorganization of our marine business. These actions have positioned our business to be able to weather the inevitable cyclicality of the global shipping industry through a lower cost struck.
That enables us to generate respectable financial returns in down markets, while preserving the ability to provide value and volatile and credit constrained markets, especially when demand strengthens.
While the high fuel prices witnessed throughout much of 2022 began to ease in the first quarter of 2023, the marine business. Nevertheless benefited from the elevated interest rate environment and continued fuel price volatility, which together with our prudent allocation of working capital enabled marine to again deliver outstanding financial performance story.
In the quarter.
Both our aviation and marine businesses have benefited from our ability to leverage our strength and stability as a preferred a reliable counterparty to support our customers skew in finance requirements amidst an increasingly constrained and costly credit environment and a continued period of heightened supply and logistical uncertainly.
While our land fuels business was liquid land fuel business was impacted by extreme weather in North America, our gas power and sustainability business has performed well our liquid landed world connects sustainability businesses are following the common operating model, we have in aviation and marine and we are now enhancing.
Our products and services realigning teams hiring top talent, where needed and leveraging our digital capabilities to build out a similar solutions ecosystem I continue to be optimistic about our liquid land gas power and sustainability business is becoming a larger and very complementary contributor.
To our overall business.
In closing, while we continue to focus on driving growth and efficiencies in our conventional fuels business activities, which remain critical to our success for years to come we recognize the evolving needs of our customers that growing global demand for sustainable solutions. We therefore continue to focus on building our lower carbon fuel offer.
<unk> as well as a growing suite of other sustainability related products and services. We are continuing to build the business that not only thrives in the present, but also paves the way for an even brighter future.
All of our successes to date are due to the collective efforts of every individuals in our organization and these are the same individuals who will lead us to a greener tomorrow in more ways than one. Thank you for your continued support I'll now turn the call over to IRA for a review of our financial results.
Thank you Michael.
And good evening everyone.
Before I walk through our first quarter results. Please note that while there were no adjustments to GAAP results in this year's first quarter, that's correct, Ken no adjustments the comparative prior year numbers do exclude the impact of non operational items, principally acquisition related expenses and integration costs all highlighted in our earnings release.
To assist you in reconciling the results published in our earnings release, the breakdown of last last year's non operational items can be found on our website and on the web.
Slide of today's webcast presentation.
Now, let's continue with the financial highlights.
Validate our revenue for the first quarter was $12 5 billion, that's up 1% compared to the first quarter of last year.
Consolidated volume for the first quarter was $4 5 billion gallons and gallon equivalents effectively flat with the prior year I'll talk a bit more about gallon equivalents shortly.
Adjusted EBITDA for the first quarter was $87 million, that's an increase of $12 million or 16% compared to the first quarter of last year.
Adjusted first quarter net income and earnings per share with $23 million 36 per share respectively. That's a decline of $4 million or six cents per share compared to the first quarter of 2022.
First quarter volume in our aviation segment was $1 8 billion gallons, that's an increase of 7% compared to the first quarter of 2022.
The volume increase in the first quarter was principally driven by a further year over year increase in commercial passenger activity.
Looking forward and considering the significantly higher interest rate environment, we are placing an even greater emphasis on generating commensurate returns, which may temper volume growth over the next few quarters. However, we remain confident in our opportunities to drive profitability at aviation over the balance of the year.
Our land segment volume was $1 6 billion gallons or gallon equivalents in the first quarter.
The slight decline of 1% compared to the first quarter of last year.
As a reminder, this gallon equivalent amount comprises liquid fuel activity as well as a growing contribution from natural gas and power volume, which represented approximately one third of the aggregate land volume reported for the first quarter.
While volume in our North American liquid fuel business was negatively impacted by adverse weather during the quarter, including two record atmospheric rivers, which dredged parts of Flyers territory on the West Coast. We were pleased to see natural gas activity offset this decline, which benefited from increased demand and a growing customer base.
And lastly volume in our Marine segment for the first quarter was $4 3 million metric tons, that's a 9% decrease year over year, driven principally by a softening container market.
Consolidated gross profit for the first quarter was $263 million, that's an increase of $32 million or 14% year over year.
Our aviation segment contributed $101 million of gross profit in the first quarter, an increase of $36 million or 57% compared to last year's first quarter results, but as you recall, we were negatively impacted by the backward dated jet fuel market that commenced in a significant way in the latter half of last year's first.
Water.
We also benefited from strong growth in our business in general aviation activities.
As we look ahead to the second quarter, we anticipate a significant seasonal increase in aviation gross profit with year over year results expected to be up even more significantly when compared to the backwardation impacted second quarter of 2022.
Our land segment delivered gross profit of $110 million in the first quarter Thats, a decrease of $10 million or 8% year over year.
As already mentioned and extreme weather events during the first quarter resulted in both volume and gross profit declines in our core liquid fuel activities in North America.
Reduced volatility and somewhat warmer weather also negatively impacted the year over year comparison of our UK land results and partially.
Offsetting these declines with strong increases in profitability in our connect natural gas power and sustainability related offerings.
For the second quarter, we anticipate land gross profit to be flat sequentially, but down from the second quarter of 2022, when our U K operations continued to benefit from significant market volatility.
The Marine segment generated first quarter gross profit of $52 million, that's an 11% increase when compared to the first quarter of last year.
While bunker fuel prices have declined marine benefited from a significantly higher interest rate and credit constrained credit environment in the first quarter as.
As we look ahead to the second quarter margins are expected to remain well ahead of historical averages. However, gross profit is expected to decline sequentially, driven principally by flattening prices and reduced market volatility.
Consolidated operating expenses were $198 million in the first quarter below the low end of the guidance provided on last quarter's call.
Looking ahead to the second quarter, we expect operating expenses will be in the range of $204 million to $208 million the.
<unk> sequential increase principally relates to increased variable compensation related to the expectation of a significantly higher consolidated results in the second quarter.
I already mentioned, our first quarter adjusted EBITDA earlier, but our year over year adjusted trailing 12 month EBITDA was also up significantly increasing 56% year over year to $392 million, our highest level of trailing 12 month EBITDA since the first quarter of 2020.
This year over year increase is inclusive of the benefit from the Flyers acquisition completed to start the year in 2022.
Interest expense for the first quarter was $34 million in line with our guidance on last quarter's call, but up $20 million from last year's first quarter when interest rates were still materially lower.
Fees associated with our receivable sales activity again comprised approximately 40% of our total interest cost in the first quarter.
We expect our consolidated interest expense for the second quarter to be flat to modestly down sequentially and we remain focused on opportunities to reduce our current run rate of interest expense.
Our adjusted effective tax rate for the first quarter was 16% compared to 20% for the first quarter and full year in 2022.
As I mentioned on last quarter's call. We believe our 2023 full year tax rate will remain generally consistent with 2022. However.
However, our quarterly rates may vary as evidenced by the low rate in this year's first quarter.
During the first quarter, we generated positive operating cash flow of $143 million driven by lower fuel prices and solid focus on and management of all components of working capital, including accounts receivable inventory and accounts payable.
I will not be easy to repeat the strong results in the second quarter with average fuel prices are already up 6% to 7% from the first quarter. We remain focused on delivering solid cash flow for the full year contributing to overall liquidity and returns.
Our liquidity profile remains strong with significant availability under our revolving credit facility.
This positions us well to pursue growth opportunities, while maintaining very important financial flexibility.
So despite it being a seasonally weak quarter for us in the first quarter, we delivered solid overall results.
Aviation delivered very strong performance in what is traditionally the weakest quarter for air travel.
While our land liquid fuels activity in North America was impacted by extreme weather on natural gas and power businesses continued to perform well.
Marine continues to outperform historical averages with very strong operating margins.
And we are now entering our seasonally strongest second and third quarters and remain optimistic about our opportunities to deliver strong results for the full year.
On the corporate development side of the house, we have expanded our team.
Our busy analyzing a growing pipeline of synergistic conventional fuel opportunities as well as a growing number of opportunities that complement our existing suite of sustainability solutions and world connect.
And our focus on operating margin improvement continues.
I frequently remind our team how many gallons of fuel we need to sell to cover each and every expense. We incur so that every member of our organization thinks critically about how each activity and cost contributes to our overall financial performance.
We are scrutinizing every aspect of our business to identify areas to eliminate waste and drive greater process efficiencies and we therefore remain confident in our ability to achieve or even surpass our longer term articulated goals for operating margin improvement.
And finally, we remain confident in our ability to continue to navigate challenges and capitalize on opportunities our strong balance sheet combined with our continuing commitment to profitable growth.
Positions us well for continued success and we remain steadfast in our commitment to delivering value to our shareholders customers and employees. Thank you I will now turn the call back over to our wonderful operator G. G for the Q&A session.
Thank you at this time I would like to remind everyone. If you would like to ask a question. Please press star followed by one one on your telephone keypad.
We'll then hear an automated message advising your hand is raised is your question has been answered and you would like to withdraw your registration. Please press star one one again, 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.
Sure.
Our first question comes from the line of Kenn Hoekstra from Bank of America.
Hey, great good afternoon.
Michael.
So just a couple from me on let's start on land I guess Ara you talked about the harsh weather.
Are you back up and running should we look at kind of the run rate, they're getting back to normal obviously typically middle of the year tends to be stronger some years are weaker than others with the UK I guess balanced out now with your acquisition. It seems like the middle ear should get stronger. So maybe just talk us through how you think about land going forward.
Well with fliers in the mix, obviously the weather conditions.
Have improved.
It happened during <unk>.
Believe months of February and March.
In.
And that business and we generally see seasonal strength as we get into the second and third quarter.
We think that'll be that will generally be the case again at the same time the <unk>.
Longer periods for the U K business, our fourth quarter and the first quarter. So we generally see a drop off obviously the heating oil business drops off dramatically in Q2. So you have some you have some pluses and minuses, but nothing extraordinary or out of the ordinary in the second quarter compared to.
Historical trends.
Okay.
By the way I just wanted to say before I get started congrats on so many things IRA but not just the fact that there is no adjustments, but now that I've gotten.
Brett Pharr version two of Aaron Rodgers should be a good year.
Thank you.
Interest expense.
Can you kind of dig into what you were talking about there obviously and we just look at it on a straight up you've got a 17% rate just on your debt, but you're talking about throwing in there you've got the accounts receivable thrown in there, but you were talking about.
Maybe holding this despite debt coming down that youre level. Your interest expense should be flat. So maybe walk us through what's what's the makeup there.
Well remember over the first few months of the year interest rates were rising there hopefully have that hopefully stock except for maybe another 25 basis points next month.
So that's where the flat comes from we do not have a 17% rate on our debt. That's the reason that I've been sharing.
The percentage of the interest related to the receivable sales our average rate on debt is just under 7% plan.
So look we're working but that number is still obviously a lot higher than where it was when interest rates were at historical lows, but.
As evidenced by this quarter, we're working really hard to drive.
Cash flow as best we can and bring down our our trade cycle, which which should help us reduce interest expense a bit going forward.
It's a little easier if rates keep going up.
But for the for the moment our run rate is what our our run rate is it will probably be a little bit lighter in Q2, and then hopefully come down a little bit more in the second half of the year as I mentioned.
Last quarter.
Okay.
My last one and I'll turn it over to Ben is just on the <unk>.
On your your Opex target right Youre $204 million to $208 million in next quarter can you walk us through is that now youre kind of run rate.
If we're looking out from there is there.
Obviously, if youre jumping up is there something that's running it up and maybe just talk about what's in it and how we should think about it going forward.
Yes, it's a great question Ken Thanks.
There are certain elements of.
Variability in our expenses on a quarterly basis that are tied to the level of profitability. One of those the example that I shared in my prepared remarks is variable compensation. So that that's not spread like peanut butter over over the course of the year, it's more directly correlated with the profit contribution by quarter.
So we generally will see a bump.
In it expenses, assuming everything else was constant in Q2 does that number will probably be a little bit higher in Q3, which is expected to be an even stronger quarter and then it should come down a bit in Q4.
So very consistent with the.
With.
With the trend of our results on a quarterly basis, the way that you have modeled out.
Perfect. Thank you so much.
Have a great fan I appreciate the time.
Thanks Jess.
Thank you one moment for our next question.
Our next question comes from the line of Ben Nolan from Stifel.
Thank you Gigi.
By the way, let me start off by just mentioning that.
I really.
The tweaks that you guys did do the presentation in your remarks.
Very very helpful. So so.
So good job on that and I appreciate it.
My first question is related to just conceptually.
The margins and you talked a little bit about this IRA but.
Yeah.
<unk> for higher margins in the aviation business. It looks like that has been pretty pretty well Don are executed in the marine side.
But maybe a little bit less so on the land and on the aviation side I'm, just trying to understand if there's something structural because.
Your cost of business has gone up with interest rates and.
It would seem like you should be able to pass that through to your customers.
Is there something that sort of.
Inhibits your ability to do that in a few of those categories.
Sure Great and important question, so I'll try to I'll.
Try to be as clear as possible in my response.
If you start with marine.
Of course, we all know we had a phenomenal year next year, which was impacted by a couple of things honestly one was.
A tremendous amount of volatility.
Record prices, but also rising interest rates.
And we're able to address that head on and more immediately in marine because as we've said over and over and over again over the years as marine is generally a spot business. So what I am.
I'm not doing it personally but when we're quoting.
Hi.
A customer we can react to market conditions.
Every day every hour of the day.
And of course, if interest rates are moving up.
We can factor that into our thinking in our in our and our return hurdle rates et cetera.
On a very regular basis.
In aviation.
Large part of aviation commercial passenger cargo et cetera, most of that activity very large percentage of that activity.
Is under annual contract a very large percentage of those annual contracts rollover on the first of July .
Some of them in Europe .
Our rolling over this quarter, but a very large percentage rollover in July so over the course of July $1 22 to June 30 to 23. The margin is what what the margin is right as as those contracts come due and this higher interest rate environment.
Being focused as we always are on returns.
We're obviously hyper focused on.
Making sure that those returns don't deteriorate.
And actually hopefully catch up a bit as.
As we're able to price.
The current interest rate into our return criteria and tried to drive higher markets one of the reasons I.
Mentioned on in my remarks that volume may be tempered, a little bit where we can't do that in some cases, we may forego some volume.
Upon renewal and there's also the other lever is terms right. It may not always be.
Achieved by getting a higher <unk>.
<unk> per gallon number in a customer engagement, but that number could stay the same in some circumstances.
And we may have tighter terms and therefore have a positive contribution to the interest line. So we can mix and match that way. So it's all about.
Increased.
Acceptable levels of returns in this interest rate environment. So we've we've certainly raise the bar there as rates have gone up land is a bit more of a mixed bag land <unk> got some spot business.
Where many parts of Flyers are spot.
<unk> seen are our core margin per gallon and land 22 was higher than 2021 and first quarter of 2003 was higher than 2022. So we are in parts of that business able to achieve a higher margin. There is a part of that business, which is the retail gas station distribution much much of that is over.
Contracts that span many many years, where we don't have the ability to go in and reprice on a regular basis, that's a business where the way that we achieve the returns that we need is higher environment has to be achieved by by driving.
Later operating efficiencies rights, there are different different levers for different parts of the business, but overall.
We're clearly.
We've clearly gotten.
The offset in marine we have a chance to get some higher margins in aviation in the second half of the year.
Then obviously.
The same goes for most of the land business, except for that retail segment.
Okay. So I hope that helps.
It does.
Thats a good excellent explanation I appreciate it.
I had just a couple more.
I wanted to circle back real quick on the on the tax side. What did you say what is the annualized tax rate that you're expecting.
Same as last year I think.
We were lower this quarter will probably be a little a little bit higher than the annual for the <unk>.
The year, but it should it should annualize out to the same 20% or so maybe 'twenty one.
Compared to last year, where we were actually also with 20, okay and any sense as to.
As you said the first quarter was low any sensitive with respect to the second quarter.
If there's any nuance.
Move it one direction or the other.
Hi.
If I had to guess there'll be a little over 20.
But it's more likely to be a little over 20% under in the second quarter.
Yeah.
And then.
As it relates to the aviation business appreciating the whole pricing dynamic that you just talked about but I know typically the peak season for that is in the second and third quarter as you have a lot of.
Vacation travel in Europe , and that sort of thing.
What's your sort of view or what are you hearing from your customers about what.
What they're expecting for.
For fuel demand aviation on the aviation side.
Over the next two quarters.
Well look I think.
Many markets.
We.
We've seen pretty much the full recovery from pre pandemic, but.
Despite all maybe I'm, providing a personal view here.
All the fears of recession in conversations around that I think a lot of people.
Leading myself are still getting on planes very regularly and I think the summer travel season in Europe , which was very strong last year is expected to be strong. This year. So I think the volume story is still pretty good the acceleration is not going to be near what it was the last five or six quarters rebounding from the pandemic.
But I think just kind of core macro volume opportunities, most particularly in North America and Europe .
Are still strong we're seeing a little bit of softening on the business in general aviation side that had a big boost.
During the pandemic when those that can afford it.
Preferred to travel private to avoid masking up et cetera, but obviously thats waned.
Many of those types of customers have reverted back to commercial travel so.
On the commercial side I think strong on the on the business in general aviation side, maybe a little bit weaker, but that's a lower lower volume number.
So I would say reasonably strong our results may be a bit different in that again, if certain business doesn't meet.
Our return criteria.
We're willing to give up a little volume for the sake of <unk>.
Driving quote unquote profitable growth.
Okay.
Then lastly for me I appreciate you bearing with me here, but.
Yeah.
Just curious on capital allocation.
You have been reducing the leverage.
It makes sense in a higher interest rate environment.
There hasnt been much in a way of buybacks lately.
As you move forward to.
Generating pretty good levels of free cash flow sort of what's the best home for that cash flow from here.
Yes.
Always a tough question in this interest rate environment, maybe I'm, making a political statement.
Buybacks aren't as accretive as they were when rates for zero.
And I think we generally.
Prefer to allocate.
A great percentage of our capital to driving driving our core business as I mentioned, our Corp. Dev team growing we actually now have somewhat specifically focused on the sustainability related side of our business. So there is a huge pipeline of inorganic opportunities, we want to keep our powder dry for that.
And then of course, there is the dividend right. So we always consider buybacks.
We've been pretty consistent over the last few years, that's not necessarily a <unk>.
Message about this year in terms of buying back enough shares to cover the dilutive impact of the <unk>.
Employee equity awards.
So we will continue to consider that but no.
No meaningful promises for what what we may throw into that bucket in 2023.
Understood I appreciate it and again I.
Do do like the tweaks that you guys would make it very helpful.
Thanks, Ben I appreciate the comments.
Thank you one moment.
Question.
Our next question comes from the line of Pavao Martino from Raymond James.
Okay.
Thanks for taking the question pleasure to be on your call for the first time could we get an update on our world connect please.
So we'll connect.
Is.
Business, we started.
Our journey, a long time ago.
Yes.
By investing in our business.
That had.
Sophistication in the natural gas business in the U S.
And that was in 2012.
We acquired a number of companies.
Sure.
The most notable one was Bergen energi in 2015.
Which.
The handles a lot of power business.
<unk>.
Renewable energy certificates <unk> is in the renewable energy solutions business does a great job in Europe and.
We're expanding that now in the U S.
With de Novo operations in Asia, and Latin America.
So.
We're using our global platform.
To continue to.
Follow our land based customers.
With any number of different services onsite solar.
Offsets.
Energy efficiency carbon footprint supporting.
So it's continuing to grow we've been adding tremendous amount of.
Talent.
To that part of the business.
As IRA commented we've got.
Pipeline.
<unk> targets there.
Presently we have been growing that organically.
But.
And then also investing in future fuels.
A little bit of money, but <unk> again, following our customers and.
Looking to.
Make sure that we are a fast follower follower on those emerging future fuels, but most notably focusing on onsite solar renewable energy solutions.
Within those two sustainability business is we've developed their natural gas business in the U S and thats been growing materially.
In the last several years in our power business.
So I think it's probably a good opportunity to talk about what we're doing there so were physical power supplier in the Nordics and Netherlands working in the <unk> market.
So we sit between the grid and the consumers of electricity and we're providing scheduling balancing forecasting services.
And we handle some of their risk management.
And then reacting more and more as an off taker for power producers wind farms, and others, where we're buying their daily production production and selling it back to the grid.
So thats what were doing most notably in Europe on power.
On the natural gas side.
It's offering natural gas supply.
Dealing with the risk management, and the <unk> side against scheduling balancing forecasting.
<unk> logistics around the product.
And then some financial optimization, we will do on our own account.
So.
<unk>.
That was the.
The commodity side of it and we continue to <unk>.
Develop that in sourcing demand in Asia Latin America.
It's an important part of the business it is growing.
At a pretty good clip, we'd like to continue to super size that a bit more.
So thats Thats basically world connect on our sustainability I, probably forgot a couple of things IRA anything you want to add so just to try to frame that in the numbers a little bit, but as Mike said its been growing.
So in the first quarter.
25% of lands gross profit relate.
Related to the Nat gas and power activity and the sustainability and advisory.
Services. So that's that's grown it's still a relatively small number.
From a consolidated from a consolidated standpoint, but it has grown significantly from where it was just a short time ago. So it's.
It's moving forward on.
A pretty steady clip.
And.
Dropping more to the bottom line as well and that's an area, where we will continue to invest.
I appreciate all that detail.
Let me zoom in on.
Kind of an emerging market angle of your.
Both.
All three businesses, but perhaps most notably in aviation.
A lot of the currencies I'm thinking Argentinian peso lira are literally all time lows against the dollar right now to what extent is that hurting demand.
Four in party fuel in those markets.
Kevin I think in answer here.
Yes listen.
It's not something that I'm aware of as being a topic certainly not anything thats been brought up in.
Any of our set of meetings.
So.
But <unk>, maybe you've got a little bit of color on that or I'll say.
Not sure exactly what the full angle there <unk>, but most of our activity around the world on the fuel side, regardless of jurisdiction and we're talking about a lot of jurisdictions right because we're selling fuel.
Over 200 countries and territories around the World is U S dollar base.
So.
The FX side of the equation may have some indirect impacts, but we're buying and selling in U S dollars.
Almost everywhere, we do have some <unk>.
Foreign currency denominated activity.
But on the fuel side, it's mostly USD.
But I think.
King.
He asleep, Russia, and what's going on in terms of just different markets I am sure. There is any number of activities there, but that's not it's not something that were zeroed in on or it's not anything that is mainstream for us that I know of.
Okay clear enough. Thank you.
Thanks for dialing in for Bill I appreciate it.
Thank you Mr. <unk> there are no further questions at this time I will now turn the call back to you for closing remarks.
Well this is not necessarily closing remark.
In terms of.
Our land business.
Sure.
You asked the question earlier and.
It's off to a bit of a a.
A bit of a start with the weather.
But.
It's a well run business suppliers seems great addition.
We've brought on some additional talent and I'm really just emphasizing.
<unk>.
The comments that I had.
In my prepared.
Statements.
So.
Feel strongly about the fact that we're modeling those offers and the business and the processes against our well run marine and aviation business.
So while it's not an exact.
Sort of overlay there is a lot of commonality that we're going to leverage off of our marine and aviation organizational design at the end of the day, we're moving molecules.
We're dealing with the logistics were.
The customers coming to us in our card locks.
Going to the customer and wholesaler.
Business through their retail stations so.
That business has taken a long time to be the fourth and fifth leg of the stool, but I'm optimistic that it will be.
And we will be reporting back to you on.
On a quarter by quarter basis, So I just wanted to sort of emphasize that obviously.
Can't control the weather.
But that business will start to produce in any case. Thanks very much appreciate you spending your time with us and look forward to talking with you next quarter and thanks to the fantastic team that we have it's a pleasure working with you every day, thanks to our shareholders. Thank you very much take care.
Ladies and gentlemen that does conclude the conference call for today, we thank you for your participation and also you. Please disconnect your line.
Okay.
[music].
Okay.
[music].
Okay.
Okay.
Okay.
[music].
Yes.
[music].