The lubricants business of Hong Kong-based Yip’s Chemical Holdings Ltd. reported an operating loss and an 8% decline in sales for the first half of this year, citing reduced automotive lubricant demand and increased raw material prices as key factors.
The company’s lubricants business reported an operating loss of $2.9 million Hong Kong dollars (U.S. $370,000) for the first half of this year, falling from an HK$11.3 million operating profit for the same period in 2021.
“Due to the slowdown in the demand for automotive lubricants, and the surge in oil prices caused by the conflict between Russia and Ukraine – which led to the increase in raw material prices of the lubricants business, the lubricant business witnessed a turn from profit to loss,” CEO Tsz Hin “Stephen” Yip said in the company’s interim earnings report.
Sales revenue reached HK$172.7 million for the first six months of this year, compared to HK$188.5 million.
The CEO said that in looking ahead to the second half of this year, “the group will continue to develop other lubricant businesses, including [original equipment manufacturer] and cooperation with other brands, and will continue to reduce operating costs, in order to turn the business around.”
Yip’s Chemical Holdings began producing lubricants in 1992 and today supplies automotive, industrial and specialty lubricants under the Hercules and Pacoil brand names. The group produces and sells petrochemical products, including solvents, coatings, inks and lubricants. Its nationwide sales network covers all major provinces and cities across China.