Q1 Earnings: Valvoline, Clean Harbors, HCC

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Valvoline reported increased operating income, Clean Harbors Safety-Kleen segment posted higher revenues and Heritage-Crystal Cleans oil business segment reported lower revenue for the quarter ending March 31.

Valvoline

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Valvoline reported operating income of $108 million for its three operating segments – North America, quick lubes and international – for the quarter, up 1.9 percent from $106 million in the year-earlier period. The quarter ending March 31 is the second quarter of Valvolines fiscal year.

The three segments posted total sales of $569 million for the quarter, up 10.7 percent from a year earlier. The core North America segment accounted for about 45.3 percent, quick lubes for 27.8 percent and international for 26.9 percent of sales.

North American lubricant sales volume remained unchanged at 24.6 million gallons, compared to a year earlier. The company attributes the flat volume to gains in non-branded volume, offset by a modest decline in branded volume that took place in the do-it- yourself channel, according to the earnings report.

Lubricant sales through the companys quick lubes increased 7.2 percent to 5.9 million gallons.

Valvoline Instant Oil Change ended the quarter with 1,141 total stores, up 33 from a year earlier.

International lubricant sales – excluding unconsolidated joint ventures – edged up to 15 million gallons for the quarter, from 14.9 million gallons a year earlier.

The benefit of our multi-channel model was evident in the quarter with strong performance in quick lubes and international, offsetting results in core North America, where short-term margin pressure negatively impacted profitability, Valvoline CEO Sam Mitchell said in the companys earnings report.

Clean Harbors

Clean Harbors Safety-Kleen segment – which includes oil rerefining – reported $309.9 million in third-party revenues for the first quarter, up 5.8 percent from $292.9 million a year earlier. The third-party revenues include the sales of base oil, blended products, reclaimed fuel oil and a small amount of other products.

In an improving pricing environment, we effectively managed the spread within our re-refining business while waste oil collection remained strong, Clean Harbors Chairman, President and CEO Alan McKim said in the companys earnings report. We also continued to advance our closed-loop initiative with direct lubricant sales accounting for 5 percent of our total volume, up from the prior quarter.

McKim said the combination of increasing waste volumes throughout its disposal network and an improved pricing environment for base oil and blended products helped drive Clean Harbors overall financial performance. We experienced favorable trends across many of our key industry verticals, including chemical, manufacturing and energy, supported by an improved macroeconomic environment, he added.

Heritage-Crystal Clean

Heritage Crystal Cleans oil business segment – which includes used oil collection activities, sales of recycled fuel oil and re-refining activities – posted $25.7 million in revenues for the quarter ended March 24, down 5.5 percent from $27.2 million in the year-earlier period.

The Elgin, Illinois-based company attributed the revenue decrease to unplanned downtime at its rerefinery in Indianapolis, Indiana, and significantly lower charges to customers for its used oil collection services.

As we alluded to earlier this year, the unplanned downtime at the rerefinery during the first quarter limited our ability to produce and sell product as well as led to higher operating costs, Brian Recatto, HCCs president and CEO, said in the companys earnings report.

The extended unplanned downtime caused a back-up in our logistics network, which affected all aspects of this segment. The back-up of our logistics impeded our ability to offload railcars at our rerefinery, as well as our ability to offload our service vehicles due to lack of empty vehicles. Looking forward, our rerefinery has been fully operational since before the beginning of the second quarter, and we are currently enjoying our highest base oil pricing since 2014, he continued.

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