Income Down at Valvoline, HollyFrontier

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Valvoline reported a slight decrease in operating income, HollyFrontiers lubricants and specialty products posted a decrease in net external income and Clean Harbors Safety-Kleen segment reported increased revenues, all for the quarter ending June 30.

Valvoline

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Valvolines three operating segments – North America, quick lubes and international – reported combined operating income of $99 million for the quarter, down from the year-earlier periods $100 million. The quarter ending June 30 is the third quarter in the Lexington, Kentucky-based companys fiscal year.

The three segments combined for total sales of $577 million, an 8 percent increase from the $534 million from the same period last year. The North America segment accounted for 45.8 percent of those total sales, quick lubes for 28.9 percent and international for 25.3 percent.

North American lubricant sales volumes reached 25.5 million gallons in the quarter, down slightly from last years 25.8 million gallons in the same quarter. Valvoline cited declines in branded and non-branded volume of 1 and 2 percent, respectively. Volume sold through the do-it-yourself channel grew 2 percent but was offset by soft performance in do-it-for-me installer channels, according to the release.

Lubricant sales through the companys quick lubes totaled 6.2 million, a 10.7 percent increase from the same period last year.

Valvoline Instant Oil Change opened 10 stores during the quarter and has opened 41 since the 2017 third quarter. On July 13, Valvoline acquired 73 franchised locations from Canadian quick lube chain Great Canadian Oil Change, the companys first international quick lube acquisition. Great Canadian Oil Change is the third-largest quick lube chain in Canada.

International lubricant sales – excluding unconsolidated joint ventures – dropped 2.1 percent to 14.3 million gallons from the 14.6 million gallons sold in the same period last year.

In the quarter we experienced weaker-than-expected volume and short-term margin pressure driven by raw material cost inflation. As a result, our third quarter results came in below our expectations, Valvoline CEO Sam Mitchell said in the companys earnings release.

HollyFrontier

HollyFrontier Corp.s lubricants and specialty products segment reported $29.4 million in net income from operations for its second quarter, a 13.2 percent decrease from the year-earlier period. However, the segments revenues from external customers for the Dallas, Texas-based petroleum refiner in the second quarter totaled $459.4 million, up 3.5 percent.

The lubricants and specialty products segment Petro-Canada Lubricants and its Mississauga, Ontario, refinery, which makes products such as base oils, white oils, specialty products and finished lubricants, along with specialty lubricant from HollyFrontiers Tulsa refineries.

Within our lubricants business, healthy finished product demand and our integrated business model are generating consistent earnings despite a weak base oil market, HollyFrontier President and CEO George Damiris said in the companys earnings release.

The company also closed its previously announced acquisition of Red Giant Oil Co. on Aug. 1.

Clean Harbors

Norwell, Massachusetts-based Clean Harbors Safety-Kleen segment – which includes oil rerefining – posted third party revenues of $328.7 million in the second quarter, an 8.5 percent increase from $303 million in the same period last year. Such revenues include sales of base oil, blended products, reclaimed fuel oil and other products.

We delivered strong second-quarter results, with significant top- and bottom-line contributions from both of our segments. Safety-Kleen continued to capitalize on the favorable pricing environment for base oil and blended products in the quarter, Clean Harbors Chairman, President and CEO Alan S. McKim said in the companys earnings news release.

We grew waste oil collection volumes from those of a year ago, while maintaining an average charge-for-oil position for those collected gallons, McKim continued. We continued to steadily grow direct lubricant sales through our closed-loop initiative, which has now surpassed 20,000 customers. Direct lubricant sales accounted for 6 percent of our total volumes sold in the quarter, up from the prior year and from the first quarter of 2018.

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