Heritage-Crystal Clean’s oil business segment reported 45% higher revenue for its second fiscal quarter ending June 18, getting a boost from increased base oil prices and a higher operating margin.
Revenue for the company’s oil business segment ballooned to a record $64.8 million, improving from $44.6 million in the same period last year. The segment includes used oil collection activities, rerefining activities and sales of recycled fuel oil.
“An increase in base oil prices was the main driver of the increase in revenue,” the company, based in Elgin, Illinois, said in its earnings news release.
HCC noted that the operating margin for its oil business segment increased to 41.4% in the second fiscal quarter this year, compared with 34.2% in the same period last year. The higher operating margin was mainly due to an increase in the spread between the netback – sales price net of freight impact – on its base oil sales and the price paid/charged to its customers for the removal of their used oil, the company said.
“Structural changes in the used oil rerefining business, along with refining industry capacity limitations, provided the foundation for our team to deliver excellent results during the second quarter,” HCC President and CEO Brian Recatto said.
HCC’s rerefinery in Indianapolis has 3,000 barrels per day of API Group II and 200 b/d Group I base oil production capacity.