Jason Eisner's questions to AE leadership • Q3 2023
Question
Asked for clarification on the GulfMark business's gross margin and risk profile, specifically how much is a pass-through spread business. He also asked about the internal, first-party benefits of the VEX pipeline acquisition for the company's own operations.
Answer
Executives explained that they intentionally keep the margin details "gray" for competitive reasons, as it provides flexibility in negotiations. They characterized it as a higher-margin, service-related business, not a simple volume pass-through. They do not speculate on oil prices; they buy to meet committed sales from refiners and keep inventory lean, turning it over quickly each month. The VEX pipeline provides significant internal benefits by eliminating 50-70 truck trips per day, which saves costs, improves fleet efficiency, and reduces risk.