Results Decline at Calumet, Valvoline, Quaker


Results Decline at Calumet, Valvoline, Quaker

Calumet Specialty Products Partners L.P. reported a net loss, Valvoline posted a slight decrease in operating income, HollyFrontier’s lubricants and specialty products segment reported higher income from operations and Quaker Chemical posted a net loss, for the quarter ending March 31.


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Calumet posted a net loss of $14.4 million for the first quarter, down from a net profit of $16.4 million in the year-earlier period.

The Indianapolis-based company’s first quarter sales dropped 18.6 percent to $692.6 million, down from $851.3 million.

“Our core specialty business delivered strong profitability in the quarter, driven by the partnership’s commercial excellence initiatives that have led the improvement in our sales mix and maintaining our margins in a falling crude price environment,” Calumet CEO Steve Mawer said in the company’s earnings news release.

Mawer noted that while federal guidelines and state orders have deemed Calumet’s businesses as essential, “the economic impacts of the virus are starting to be evident in a number of our end-markets. To date, our business operations have continued with limited interruption to our supply chain, and we will work to service the needs of our customers through this period of uncertainty.”

First-quarter specialty product sales volumes declined to 92,143 barrels per day, down from 109,022 in the year-earlier period. Lubricating oils slid to 10,240 b/d, down from 12,357 b/d. Packaged and synthetic specialty products – including production at the company’s Royal Purple, Bel-Ray, and Calumet Packaging facilities – fell to 1,405 b/d, down from 1,874 b/d. The company also reported a decline in wax sales volumes to 1,271 b/d, down from 1,379 b/d.


Valvoline reported operating income of $105 million for its three operating segments – North America, quick lubes and international – for the quarter, down 2 percent from $107 million in the year-earlier period. The quarter ending March 31 is the second quarter of Covington, Kentucky-based Valvoline’s fiscal year.

The three segments posted total sales of $578 million for the quarter, down 2 percent from $591 million a year earlier.

Northern American lubricant sales volume for the quarter reached 20.9 million gallons, down 6.7 percent from 22.4 million gallons. “The majority of the volume decline was in the installer channel, driven by the company’s decisions to not renew lower-margin business and to repurchase inventory from a distributor partner as part of ongoing efforts to improve inventory management,” the company noted.

Lubricant sales through Valvoline’s quick lubes were flat at 7.1 million gallons for the quarter, up slightly from 7 million gallons.

International lubricant sales – excluding unconsolidated joint ventures – declined almost 9 percent to 13.7 million gallons for the quarter, down from 15 million gallons a year earlier.

“In March, we began to see meaningful impacts to our business due to the decline in miles driven caused by the Covid-19 shelter-in-place and lockdown regulations,” CEO Sam Mitchell said in the company’s earnings news release. “In March, we also saw a healthy rebound in China as local restrictions there began to ease.”


Dallas, Texas-based HollyFrontier Corp. reported $10.1 million in income from operations for its lubricants and specialty products segment for the first quarter, rebounding from a $9.1 million loss in such income in the 2019’s first quarter.

Revenues from external customers for the segment reached $523.5 million, up more than 6 percent from $493.3 million.

“HollyFrontier delivered strong financial results in the first quarter driven by healthy margins in our refining and finished lubricants businesses,” HollyFrontier President and CEO Michael Jennings commented in its earnings news release.

The Covid-19 pandemic caused a decline in U.S. and global economic activities during the first quarter of 2020, the company noted. “As a result, the demand for, and the resulting price we receive for, the sale of our products, including gasoline, jet fuel, lubricants and other products, has decreased during the last weeks of the first quarter of 2020,” HollyFrontier stated.

Dallas, Texas-based HollyFrontier acquired Petro-Canada Lubricants Inc. in 2017. According to HollyFrontier’s earnings news release, the lubricants and specialty products segment includes Petro-Canada Lubricants’ production operations in Mississauga, Ontario, including products such as base oils, white oils, specialty products and finished lubricants, and the operations of the business that include marketing of products to both retail and wholesale outlets through a global sales network with locations in Canada, the United States, Europe and China. The segment also includes specialty lubricant products produced at HollyFrontier’s Tulsa refineries that are marketed throughout North America and distributed in Central and South America. In addition to API Group I base oil, the company’s Tulsa, Oklahoma, refinery also produces specialty process oils, horticultural oils and wax, according to the company’s web site.

In August 2018, HollyFrontier acquired Red Giant Oil Co., which has storage and distribution facilities in Iowa, Kansas, Utah and Wyoming, along with a blending and packaging facility in Texas. Red Giant is one of the largest suppliers of locomotive engine oil in North America.

In February 2019, the company acquired Sonneborn, a producer of specialty hydrocarbon chemicals such as white oils, petrolatums and waxes, with manufacturing facilities in Pennsylvania and the Netherlands.

Quaker Chemical

Quaker Chemical – also known as Quaker Houghton – reported a $28.4 million net loss, down from $13.8 million in net income in 2019’s first quarter. The net loss was attributed mainly to two non-recurring items – a $38 million non-cash impairment charge for certain intangible assets and a non-cash $22.7 million settlement charge related to termination of a United States-defined benefit pension plan.

Net sales reached $378.6 million in the first quarter, up 79 percent from the year-earlier period. This quarter-over-quarter increase included additional net sales from Houghton and Norman Hay of $190.3 million. Excluding those net sales, first quarter net sales would have declined 11 percent, primarily driven by a decrease in sales volumes of 5 percent, a negative impact from foreign currency translation of 3 percent and a decline from price and product mix of 3 percent.

“The largest driver of the volume decline in the current quarter was the negative impact of Covid-19,” the company said in its earnings news release, “most notably on lower volumes in the company’s Asia/Pacific reportable segment as well as a decrease in volume driven by Boeing’s decision to temporarily stop production of the 737 Max aircraft.”

Conshohocken, Pennsylvania-based Quaker Chemical completed the merger with Houghton in August last year, forming the new Quaker Houghton. Quaker Houghton last October closed on its acquisition of the operation divisions of Coventry, United Kingdom-based Norman Hay, whose Surface Technology division provides dry-film lubricant coatings that provide friction control.

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