Last week brought positive financial reports from two lubricant suppliers and a major refiner, as both Quaker Chemical and Milacrons Industrial Fluids segment reported increased profits. South Korean refiner SK Corp. also reported strong profits for its lubricant division.
SKs lubricant division reported a 91 percent increase in operating profit for the three months ended Sept. 30 to 56.2 billion South Korean Won (U.S. $59.7 million), up from 29.5 billion Won (U.S. $31.3 million) during the same period in 2005. Sales for the lubricant division also increased by 51 percent to 262.8 billion Won (U.S. $279 million), up from 173.6 billion Won (U.S. $184.4 million) during the same period in 2005.
SK, of Ulsan, South Korea, attributed the increase to increased capacity of its lube base oil plants, resulting from the change of dewaxing catalysts earlier this year. The company said tight supply market conditions and increased demand for Group III VHVI base oil contributed to the increase in sales and operating income.
Conshohocken, Pa.-based Quaker Chemical reported operating income of $5.3 million for the three months ended Sept. 30, up from $3.9 million during the same period of 2005. Net sales rose 10.1 percent to $116.4 million, due to higher sales prices and volume growth.
The company attributed the improvement to increasing contributions from strategic initiatives such as Asia/Pacific growth and CMS [chemical management services], persistent pricing attention and the fourth quarter 2005 repositioning of the companys cost base. It has also benefited from strong global steel demand in 2006.
The recent easing of crude oil prices may help mineral oil in the long term, but this year so far were still facing increases in mineral oil prices, said Ronald J. Naples, chairman and chief executive officer for Quaker Chemical. Further, we have observed that global steel and automotive production has been outpacing demand in some markets over the past few months.
Milacrons Industrial Fluids segment posted net income of $1.9 million, up from $1.8 million during the same period of 2005. Sales rose 7.4 percent to $29.1 million. The company said improved pricing in North America and Western Europe helped boost sales and earnings. It said that earnings were held back in part by additional expenses associated with expanding distribution in emerging markets and continued raw material cost increases.
The company said its consolidation plan, which calls for streamlining the organization and reducing overall cost structure, is on track for completion by early 2007. Milacron is based in Cincinnati.