Afton Profits Rose in Q1


Afton Profits Rose in Q1

Afton Chemical posted a 52% climb in operating profit for the quarter ending March 31, primarily due to higher selling prices, and sales increased 6%, parent company NewMarket Corp. said in its quarterly financial report.

Afton, which is the petroleum additives segment of NewMarket Corp., posted $132.1 million in operating profit in the first quarter, up from $86.9 million in the same period last year. Partially offsetting the higher selling prices were higher raw material and operating costs and lower shipments. Shipments were down about 15%, with decreases in lube additives across all regions. Shipments have been lower the last few quarters than the company anticipated, due to economic slowdown and customer destocking.

“We are encouraged by the sequential improvement in our petroleum additives operating profit the last two quarters,” the company stated in its Apr. 27 release. “After being below our historical norms for the past six quarters, our operating margin for the rolling four quarters ended March 31, 2023, was 15.2%, which is at the lower end of the range of our long-term expectations.” We have seen improvements in the supply chain disruptions which have impacted the petrochemicals industry and our company over the past several years. Inflation continues to be a concern, and cost control and margin recovery will remain high priorities.”

That segment’s sales revenue reached $700 million, up from $660 million.

The petroleum additives segment earns most of its money from lubricant additives. It includes fuel additives supplier Ethyl Corp. but mostly consists of Afton.

Richmond, Virginia-based parent company NewMarket reported net income of $97.6 million, or $10.09 per diluted share, up from $59.3 million, or $5.75 per diluted share.

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