CBL International (BANL) - 2022 Q4 - Annual Report

Financial Performance - Consolidated revenue increased by approximately $136.37 million or 41.8%, from approximately$ 326.54 million in 2021 to approximately $462.91 million in 2022[106] - Net income rose by approximately$ 116,000 or 3.3%, from approximately $3.57 million in 2021 to approximately$ 3.69 million in 2022[109] - Gross profit for the year ended December 31, 2022, was approximately $9.13 million, an increase of$ 1.53 million or 20.2% compared to 2021[112] - Consolidated gross profit for 2022 was approximately $9,125,000, an increase of$ 1,534,000 or 20.2% compared to 2021, driven by increased gross profit per ton of marine fuel sold[178] - Total operating costs and expenses for 2022 were approximately $3,153,000, an increase of$ 761,000 or 31.8% compared to 2021, mainly due to higher selling and distribution costs and general and administrative costs[178] - Net income for 2022 increased by approximately $116,000 or 3.3% to approximately$ 3,685,000 from approximately $3,569,000 in 2021[179] - Net cash provided by operating activities was$ 3,499,000 for 2022, compared to a net cash used of $2,507,000 in 2021, indicating improved cash flow generation[185] - Net cash used in investing activities was$ 373,000 in 2022, primarily for office equipment and renovations, compared to $19,000 in 2021[187] Market Conditions - The average brent crude oil price in 2022 surged by 42.4% to$ 100.94 per barrel, compared to $70.89 per barrel in 2021[113] - The anticipated marine fuel price for 2023 is expected to remain between$ 570 and $580 per metric ton, with a fluctuation range of approximately 10% to 15%[113] - The company anticipates that crude oil prices will remain stable with a fluctuation range of approximately 10% to 15% in 2023, barring any external crises[174] - Average marine fuel prices rose from approximately$ 572.2 per metric ton in 2021 to approximately $778.8 per metric ton in 2022, representing an increase of approximately 36.1%[177] Operational Overview - The company operates in 36 ports across the Asia Pacific, with 13 of these ports being among the top 20 container ports globally in 2020[106] - The company has established a stable supply network in 34 major ports in the Asia Pacific, enhancing its competitive position in the bunkering industry[118] - The company operates a marine fuel logistics business, facilitating vessel refueling services across 36 ports in the Asia Pacific, including 20 ports in the PRC[167] - The Asia Pacific region accounted for approximately 46.8% of global marine fuel consumption volume in 2021, highlighting the strategic importance of the company's operations in this area[169] - The company has expanded its servicing network to cover more ports and offers value-added services to enhance customer satisfaction[167] - The company coordinates vessel refueling activities to align with customers' schedules during port visits, ensuring timely service delivery[168] - The company arranges local physical delivery of marine fuel to meet customer schedules, enhancing operational efficiency[168] Compliance and Regulations - The company has complied with Malaysian laws and regulations on employment, labor, health, and safety, with no non-compliance incidents reported[124] - Under the Occupational Safety and Health Act 1994, non-compliance can result in fines up to RM50,000 or imprisonment for up to two years[128] - The Employment Act 1955 governs employment practices, with minimum benefits for employees, and violations can lead to fines up to RM50,000[131][133] - The Minimum Wages Order 2022 sets the minimum wage at RM1,500 per month or RM7.21 per hour, with penalties of up to RM10,000 for non-compliance[139] - Employers must ensure workplace safety under the Occupational Safety and Health Ordinance, with fines of HK$ 200,000 for non-compliance[147] Corporate Governance - The company has established three committees under the board of directors: an audit committee, a compensation committee, and a nominating and corporate governance committee[218] - The audit committee consists of three independent directors, with Mr. Ong qualifying as an "audit committee financial expert"[219] - The compensation committee is responsible for reviewing and approving compensation for executive officers, ensuring independence from management during deliberations[221] - The nominating and corporate governance committee assists in selecting qualified individuals for the board and evaluating its performance[222] - Major shareholders include CBL (Asia) Limited with 52.7% ownership and Straits Energy Resources Berhad with 32.3% ownership[235] Taxation and Financial Obligations - Resident companies with revenue exceeding RM50 million are taxed at a rate of 24%, while those with revenue less than RM50 million are taxed at 17% for the first RM600,000[141] - The Labuan Business Activity Tax Act 1990 imposes a tax rate of 3% on chargeable profits for Labuan trading activities[142] - The Mandatory Provident Fund Scheme requires both employer and employee to contribute 5% of the employee's monthly income, subject to limits[144] - As of December 31, 2022, total contractual obligations amounted to approximately $462,517,000, including operating lease obligations of$ 353,171 and derivatives obligations of $109,346[181] Shareholder Information - The company's authorized share capital is$ 50,000, divided into 500,000,000 ordinary shares with a par value of $0.0001 each, and 25,000,000 ordinary shares are issued and outstanding[247] - The ordinary shares are listed on the Nasdaq Capital Market under the symbol "BANL," and began trading on March 23, 2023[245] - The company has not adopted any equity compensation plans and had no outstanding equity awards as of December 31, 2022[229][231] Miscellaneous - The company has not undertaken any research and development activities in the past three years[194] - There are no known trends or uncertainties that are likely to materially affect total net revenues, income, profitability, liquidity, or capital reserves for the year ended December 31, 2022[195] - The company believes its cash and cash equivalents, along with available funds from its credit facility, are sufficient to fund working capital and capital expenditure requirements for at least the next twelve months[192] - The company has not reported any material limitations on the right of non-residents or foreign owners to hold or vote its common stock[250]