- World Kinect Corporation reports a GAAP net loss of $21 million for Q1 2025.
- Aviation segment sees a 7% increase in gross profit to $116 million.
- Completed the divestiture of the UK land fuels business with a $44.5 million asset impairment charge.
World Kinect Corporation (WKC, Financial) announced its financial results for the first quarter of 2025, revealing a GAAP net loss of $21 million or $0.37 per diluted share. Despite the loss, adjusted net income was reported at $27 million, or $0.48 per diluted share, reflecting the company's efforts to mitigate restructuring and impairment costs.
The company's gross profit stood at $230 million, a decrease from $254 million in the same quarter last year. Operating cash flow was robust at $114 million, and the company repurchased $10 million worth of common stock.
Breaking down the segment performance, the aviation business experienced a 7% increase in gross profit to $116 million, mainly due to enhanced operations at European airport locations and the business and general aviation activities. However, the land segment faced a 19% decrease in gross profit to $79 million, impacted by reduced demand and lower profit contributions from the North American liquid fuel business amid economic uncertainty. The marine segment also saw a decline, with gross profit falling by 26% to $36 million due to lower bunker fuel prices and reduced market volatility.
In a strategic move, World Kinect completed the divestiture of its UK land fuels business on April 9, 2025, resulting in an asset impairment charge of $44.5 million. The sale is expected to further result in an estimated pre-tax loss of $65 million, including the reclassification of cumulative translation losses to net income, which will not affect shareholders' equity or cash flows but will be recognized in the second quarter ending June 30, 2025. The company also undertook cost management initiatives, leading to a $15 million restructuring charge primarily related to severance costs.
CEO Michael J. Kasbar stated, "Our Aviation business outperformed expectations this quarter, while our Land business faced headwinds due to challenging market conditions." He emphasized the divestiture's role in streamlining their land portfolio and reinforcing their broader financial goals.
The financial summary further revealed a year-over-year revenue decline of 14% to $9.453 billion, with a 5% drop in sales volume, highlighting ongoing market challenges. Despite these conditions, World Kinect remains focused on its core capabilities and effective cost management, leveraging a strong balance sheet to navigate through market dynamics.
