Adams Resources & Energy, which includes transportation subsidiaries Service Transport Company and GulfMark Energy, reported revenues of $152.3 million for the second quarter of 2020, compared to revenues of $484.4 million for last year’ second quarter.
The company also reported adjusted net losses of $800,000 during the quarter, compared to adjusted net earnings of $600,000 last year.
But Adams Resources also said it generated inventory liquidation gains of approximately $6 million during the quarter as a result of the recovery in crude oil prices following the dramatic decline in the market price of crude oil that began in early March, substantially due to decreased global demand and subsequent oversupply driven by the global COVID-19 pandemic.
“We are pleased with our overall performance given the challenging backdrop brought on by the COVID-19 pandemic and global decline in crude oil demand,” said Kevin J Roycraft, Adams’ chief executive officer. “These events have driven an unprecedented slowdown in global economic activity and disrupted historical supply and demand patterns. While this resulted in a decline in demand for our crude oil marketing operations and transportation services during the second quarter, we were able to mitigate these declines through operational efficiencies, pricing flexibility and product diversification.
“Both GulfMark and Service Transport saw a noticeable improvement in customer activity levels in the latter half of the second quarter after seeing significant declines at the end of the first quarter and beginning of the second quarter of 2020. In this volatile environment, we remain squarely focused on ensuring we maintain maximum flexibility in our operations and effectively controlling our cost structure.”
The second quarter also saw Adams close on the acquisition of CTL Transportation assets, which grew Service Transport’s fleet by 163 tractors and 328 trailers, and expanded the company’s footprint of operations into Florida, Georgia, Illinois, Missouri and Ohio. The collective fleet traveled approximately 3.9 million miles during the second quarter, compared to 5.6 million miles traveled during the second quarter of 2019, and 5.2 million miles during the first quarter of 2020.
GulfMark, Adam’s crude oil marketing subsidiary, marketed approximately 81,152 barrels per day (bpd) of crude oil during the second quarter of 2020, the company said, compared to 101,884 bpd during the second quarter of 2019 and 109,253 bpd during the first quarter of 2020. GulfMark held 519,927 barrels of crude oil inventory on June 30, compared to 494,812 barrels on March 31.
“I am very proud of the entire Adams team for their commitment to safety and customer satisfaction as we provide essential services that keep this country moving.
“Over the past couple of months we have been pleased to see overall improvement in our customers’ activity levels. We currently expect this trend will continue but also recognize there will be ongoing volatility in the marketplace until the COVID-19 pandemic has effectively ended and the global economy begins to recover more fully. We believe our proven business model and strong balance sheet, including a substantial cash balance and no debt, places us in a unique position for both near and long-term success.”