By Thomas Kerr, CFA
NASDAQ:UFG
READ THE FULL UFG RESEARCH REPORT
Interim 6-Month Financial Results
On October 28, 2025, Uni-Fuels (NASDAQ:UFG) reported interim financial and operating results for the 6-month period ending June 30, 2025, which exceeded our expectations.
Total revenues increased 54% from $74.1 million in the 6-month period ending June 30, 2024, to $114.6 million. This substantial increase was primarily driven by stronger sales momentum across key markets and expanded business activities.
The expansion of the company’s sales and marketing department through additional hiring has enabled the company to conduct its own marine fuels sales. As a result, the company substantially broadened its customer base and increased the number of ports to 103, which almost doubled from 52 ports a year ago.
The number of customers for marine fuel sales increased to 179 compared to 87 a year ago.
Consolidated gross profit increased from $2.07 million compared to $1.46 million in the prior year period. Consolidated gross margin for the 6-month period was approximately 1.8%, compared to 2.0% for the prior year period. This decline was partially driven by a strategic focus on expanding market presence and capturing additional market share for the reselling business. As part of the company’s stated growth strategy, resources were dedicated to acquiring new customers by offering competitive prices in line with market conditions to increase market share. By offering more competitive pricing and strategically allocating resources, the company is able to strengthen its market position and enhance profitability over the long term. We believe future gross margins for the company will be in the 1.5%-2.5% range going forward.
SG&A expenses increased to $1.89 million in the 6-month period compared to $1.35 million in the prior year period. Personnel were added in the sales and marketing department to strengthen customer relationships. Additionally, efforts in building and developing relationships with customers and business partners increased, along with business travel and marketing activities.
Pre-tax income increased to $198,477 compared to $114,785 in the prior year period. Net income decreased slightly to $90,987 from $101,972 in the prior year period due to high pre-tax income at Uni-Fuels Singapore.
Cash balances as of 6/30/25 were $6.7 million, and net working capital was $11.9 million. Total debt was $0.8 million, which was comprised of short-term trade financing to support revenue-generating operations.
Business Highlights
- Transaction volumes surged 75% year over year to 502, up from 287 in the prior year period.
- Total marine fuel deliveries increased by 90% to approximately 217,000 metric tons, compared with approximately 114,000 metric tons a year earlier.
- The company supplied marine fuels to 359 vessels, which was an 80% increase from 200 vessels in the same period last year.
- Operations expanded to 103 ports, representing a 98% increase from 52 ports a year ago, reflecting broader global coverage and customer reach.
- The company strengthened its customer base and served 179 customers through the 1st half of 2025, an increase of 106% from 87 customers in the prior-year period.
Valuation
We believe Uni-Fuels has the potential to deliver strong revenue growth and positive earnings over the next 10 years as it continues to expand into additional markets and executes on its sales and marketing efforts. We believe the company can generate strong double-digit annual revenue growth over the next 10 years. In the near term, we expect revenue growth in the 20%-30% range. The company should be able to maintain industry gross margins in the range of 1.5%-2.0%. As the company expands into higher-margin ancillary services, we believe gross margins could exceed 2.0% depending on market conditions and industry dynamics.
Our primary valuation tool utilizes a Discounted Cash Flow process. We are lowering our discount rate due to lower prevailing interest rates expected on a going-forward basis. Under the scenario described above, we maintain our DCF-based valuation target of $7.00 per share.
Our 2025 full-year revenue estimate is now $217.3 million, and our 2025 EPS remains the same due to elevated investments in the company’s strategic growth plans. For 2026, our revenue estimate is $271.5 million, and our EPS estimate is $0.05.
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