Calumet Posts Earnings Turnaround

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Calumet Posts Earnings Turnaround

Calumet Specialty Products Partners L.P. reported much improved earnings for the quarter ending Sept. 30, showing signs of emerging from COVID-19 pandemic-related challenges and supported by record specialty product margins.

Meanwhile, Valvoline’s operating income and sales from its three segments increased year over year, and Quaker Chemical reported record net income and higher sales for the quarter.

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Calumet

Indianapolis-based Calumet reported net income of $51.5 million for the quarter ending Sept. 30, a sharp improvement from a $56.1 million net loss in the same quarter in 2020.

The company’s third-quarter sales grew 54% to $874.9 million, up from $568 million.

Calumet CEO Steve Mawer said the company’s team made excellent progress on many fronts in the quarter. “It was our best quarter in over a year and shows that we are emerging strongly from the challenges of the pandemic,” Mawer said in the company’s earnings news release.  Among the factors he cited were record specialty margins and Calumet’s integrated specialties complex in North West Louisiana benefitting from the company’s ability to produce its own feedstocks.

Demand across both of the company’s specialty businesses was excellent, he noted. “Supply chain issues were forced on our Performance Brands segment, where we have received 38 force majeure notices this year from suppliers,” Mawer said. “Unscheduled maintenance at one of the industry’s major suppliers has exacerbated the shortage of lubricant additives. This has represented a major challenge for the entire packaged lubricants industry and our operations.”

Specialty products production volume was up .02% at 10,817 barrels per day for the quarter. Lubricating oils reached 7,163 b/d, a 13% increase, and wax sales were up 28% at 1,529 b/d.

Production for performance brands, a separate category that includes packaged and synthetic specialty products, declined 16% to 1,226 b/d.

Valvoline

Operating income for Valvoline’s Retail Services segment increased 33% to $88 million for the quarter, improving from $66 million, and was also up 57% from results in the same quarter in 2019. For its other segment, Global Products, operating income fell 24% to $65 million, and was also down 14% from the same period in 2019.

The Retail Services segment’s sales grew 39% to $352 million in the quarter and were also up 59% from sales in the same period in 2019. Global Products’ sales rose 21% to $483 million in the quarter, and were also up 19% from the same quarter two years earlier. Under the Global Products segment, lubricant sales volume reached 41.2 million gallons, up 9%, and up 6% from two years earlier.

“We continue to see robust global demand for our products and services, benefiting from ongoing improvements in miles driven and increasing number and age of vehicles in operation,” Valvoline CEO Sam Mitchell said in the company’s earnings news release.

The quarter ending Sept. 30 is the fourth quarter of Valvoline’s fiscal year.

For the company’s full fiscal year, Retail Services’ operating income grew 54% to $321 million in the quarter, and was also up 57% from the same period in 2019, and Global products’ operating income was up 33% at $88 million, and was also up 57% from the same quarter two years ago.

Full fiscal year sales for Retail Services reached $1.2 billion, a 38% increase, and a 49% jump from 2019’s equivalent period. For Global Products, segment sales rose 20% to $1.8 billion, and was also up 12% from the same quarter in 2019. Lubricant sales volume for the fiscal year reached 160.9 million gallons, a 16% increase, and up 7% from the same period in 2019.

Mitchell said the Global Products fiscal year results came “…as we continued to gain share in key international markets and expanded distribution in North America, leveraging the strength of our brand and technology. As expected, rising raw material costs did pressure margins in the fourth [fiscal] quarter.”

In May, Valvoline announced it would restructure its business model for the third fiscal quarter of this year, renaming its Quick Lubes segment to Retail Services and consolidating its Core North America and International segments into Global Products. Retail Services comprises Valvoline’s oil change stores in the United States and Canada, while Global Products focuses on sales of lubricants and other maintenance products through channels other than quick lubes.

“As we recently announced, we believe that now is the time for both segments to develop unique capital structures, capital allocation policies and operating strategies to best position themselves for an evolving global car parc,” Mitchell said.

Quaker Chemical

Quaker Chemical – also known as Quaker Houghton, reported net income of $31.1 million for the third quarter, a 14% increase from $27.3 million net income in the year-earlier period.

Net sales rose 22% to $449.1 million, improving from $367.2 million.

The company attributed the higher net sales primarily to factors such as higher sales, additional net sales from acquisitions, increases from selling price and product mix, and the positive impact from foreign currency translation. “The increase in selling price and product mix is primarily the result of the company’s price increases implemented in 2021 to help offset the unprecedented increases in raw material costs the company has experienced throughout 2021,” the company stated in its earnings news release. “We had record net sales for the third quarter despite being negatively impacted by the automotive semiconductor shortage and continued supply chain challenges,” Chairman, CEO and President Michael F. Barry commented.