For the quarter ending Dec. 31, lubricant blender Valvoline reported a hefty increase in operating income and increased sales compared to the year-earlier period. South Korean base oil refiner SK Energys lubricants division reported a drop in quarterly and full year operating profit.
According to parent company Ashland, Valvoline reported operating income of $67 million for the three months ending Dec. 31, which is the first quarter of Ashlands fiscal year. The operating income was up 71.6 percent from $19 million in the year-ago quarter. Same-store sales at Valvoline Instant Oil Change increased by 4 percent over the year-earlier period. Total lubricant volume increased by 22.4 percent over the year-ago quarter.
Valvolines sales for its fiscal first quarter reached $400 million, up 3 percent from $388 million in the year-ago quarter.
Covington, Ky.-based Ashland on the whole recorded a net profit of $86 million, on more than $2 billion revenue in the quarter. Each of our businesses is currently showing some signs of demand improvement and stable or improving margins, said Ashland Chairman and CEO James OBrien. Although raw material cost increases may well occur during the fiscal year, our continued emphasis on pricing and cost management should support both increased profitability and growth as the economy recovers.
SK Lubricants, the lubricants division of SK Energy, for the three months ending Dec. 31 saw a 44 percent decline in operating profit, to 44 billion won (U.S. $38 million), down from 81.4 billion won ($70 million) in 2008s fourth quarter. For 2009, the Seoul-based lubricants division recorded an operating profit of 8.2 billion won ($7 million), compared to 254.4 billion won ($219 million) in 2008.
SK Energy did not list fourth quarter and full year sales figures for the lubricants division in its earnings presentation, noting that the lubricants divisions fourth quarter business earnings are reflected as equity method gains following the spin-off on Oct. 1, 2009. SK Energys lubricants division was spun off into a new, wholly-owned subsidiary at that time.
SK operates a 21,000 barrel per day base oil refinery in Ulsan, South Korea, where API Group II and III production is targeted at high quality passenger car motor oils. The SK-Pertamina joint venture plant in Dumai, Indonesia, which is 65 percent owned by SK, has about 7,000 b/d of Group III capacity.