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Endofa after first profit: "We're better at choosing our battles"

Danish bunker company Endofa has become better at saying no and focusing on the bottom line instead of growing revenue. This change in culture is part of the explanation behind the group's profit in 2016, CFO tells ShippingWatch.

A more conservative approach to buying and selling marine fuel has paved the way for the first profit in Endofa's history.

After major losses during its first years, Endofa has finally managed to book a profit in 2016, in which the bottom line showed DKK 3.5 million (USD 535,000) compared to a large deficit in the previous year.

Before we were busy creating growth but unfortunately that meant that we forgot the bottom line"

Torben Okkels, CFO, Endofa
The improvement is especially related to the fact that the bunker company now concentrates on making money instead of growing its revenue, which had been the strategy when the company was founded in late 2012.

Meanwhile, Endofa's brokers learned to remain calm before closing deals, says CFO Torben Okkels.

"We focused on our bottom line which followed us in everything we do. Before we were busy creating growth but unfortunately that meant that we forgot the bottom line. We changed that in 2016," says the CFO, who was hired in the fall of 2015 to get risk management under control after three years with a combined deficit of almost DKK 100 million.

"We're better at choosing our battles. Despite a lower oil price in 2016, we still grew our revenue to almost DKK 1 billion while the bottom line shows a profit," he tells ShippingWatch.

Brokers shifted focus

Peering in from outside, Endofa definitely looks like a company that has gone through major changes.

Last August, CCO Peter Grunwaldt stepped down after two years in the position. In the spring 2017, founder and partner Allan Frost also parted ways with Endofa in order to found his own bunker company Dania Energy, although this company is partially owned by Endofa's holding company.

Meanwhile, a case concerning a failed oil deal in Ghana has plagued the company throughout the year.

Torben Okkels has a professional background as accountant for firms including Clipper, Torm, and Dong energy. Photo: Endofa.

Furthermore the strategic direction has changed. This shift has been underway for two years at Endofa and the process required a new way of thinking at the young firm.

"By nature, brokers don't really like to say no. They want to make deals – that is usually how they're evaluated. So we implemented new ways of evaluating them, so it's not all about revenue. This means that they have a more healthy focus on how to contribute to our result so we can continue as a company," Okkels tells ShippingWatch.

Expects profit in 2017

Going forward, Endofa expects to continue down the same path. After initial years of major expansion, opening offices in Houston, Dubai, Nice, and Copenhagen, the growth plans are now on hold.

"We will not be opening new offices or entering new markets. It's about consolidating our current business," says Okkels, explaining that the strategy is instead about focusing on geographic and business niches in West Africa.

"We tell our customers honestly that we want to help those where we can actually make a difference instead of competing on markets where there are much larger players than us," Okkels.

After a weak ending last year in which the competition on the bunker market was rough, 2017 started better, and Endofa now expects to land a profit for the entire year in the same range as 2016.

Revenue will likely decline, however, the company informs while highlighting that the managerial changes took place independent on the results over recent years.

English Edit: Gretchen Deverell Pedersen

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