Calumet Specialty Products Partners L.P. reported a fourth quarter net loss of $82.6 million, worse than a $38.6 million loss for the same period of 2019. For the full year, the company posted a $149 million net loss, declining from a $43.6 million net loss in 2019 – results that it attributed to a variety of impacts from the COVID-19 pandemic.
Sales revenue for Indianapolis-based Calumet’s fourth quarter declined 29% to $553.9 million. For the full year, sales dropped 32% to $2.3 billion.
Get alerts when new Sustainability Blog articles are available.
In its annual report, Calumet said that its sales and net loss figures were principally affected by factors such as demand for specialty products and fuel products, prices of raw materials, prevailing crack spreads for fuel products and the price of natural gas used as fuel in its operations. “Segment results were impacted by softer demand due to the COVID-19 pandemic in 2020, but the impact was largely offset from stronger margins in both the specialty oils and waxes business and the finished lubricants and chemicals business,” the company stated
According to the annual report, sales of specialty products amounted to $1.1 billion in 2020, down 21% from 2019. Lubricating oils sales declined 20% to $473.4 million. Sales of packaged and synthetic specialty products from the company’s Royal Purple, Bel-Ray and Calumet Packaging facilities increased about 1% to $234.2 million. Sales of waxes rose 8% to $129.1 million.
In the fourth quarter, specialty products sales volumes reached 23,175 barrels per day, up from 22,137 b/d a year earlier. Lubricating oils were 11,049 b/d, up from 10,420 b/d. Packaged and synthetic specialty products declined to 1,303 b/d, from 1,163 b/d. Waxes increased to 1,510 b/d, compared to 1,015 b/d.
One factor impacting the company in 2020 was a reduction in demand for certain specialty products as a variety of customers and industries were adversely affected by the pandemic. “Our broad range of applications and diversification of end-use markets has allowed our specialty products business to maintain margin despite the pandemic,” Calumet said.
The company noted that in addition to the impacts from COVID-19, dramatic fluctuations in international oil production contributed to a sharp drop in prices for crude oil and refined products in the first half of 2020. As governments began to lift COVID-19 related restrictions in the second half of 2020, it noted, economic conditions began to improve.
Calumet CEO Steve Mawer said COVID-related demand weakness presented challenges to the company’s fuels business throughout the year, with its results negatively impacted by factors such as weak refining fundamentals. “Despite this, the partnership took decisive actions and delivered a record-setting safety performance, a step change in our cost structure and a laser focus approach on satisfying our customers during a difficult time,” Mawer said in the company’s earnings news release. “These actions, combined with strong organic growth in specialties, led by a record year in our finished lubes and chemicals business, helped Calumet generate positive free cash flow in the most challenging of circumstances.” Free cash flow refers to cash that remains after a company pays operating expenses and capital expenditures.