Afton Chemical reported a 45% jump in operating profit despite a 5% decline in sales for second quarter, boosted by increased selling prices that the company noted were partially offset by lower shipments and higher operating costs.

The company, which is the petroleum additives segment of NewMarket Corp., reported operating profit of $132.1 million for the second quarter, improving from $91.2 million in the same period last year.

Sales for the segment declined to $684 million, compared to $721 million. “Shipments were down 16.7% between quarterly periods, with decreases in both lubricant additives and fuel additive shipments,” NewMarket said in its earnings release. All regions contributed to the decrease in lubricant additives shipments, the company noted.

“Shipments have been lower than our expectations over the last few quarters, as we continue to see the effects of customer destocking and global economic weakness,” NewMarket stated.

The company noted it is still challenged by higher operating costs due to the ongoing inflationary environment. “Cost control and margin management remain high priorities for us,” the company said.

Richmond, Virginia-based NewMarket reported net income of $99.6 million, or $10.36 per diluted share, for the second quarter, up from $66.5 million net income and $6.54 per diluted share.

WD-40

WD-40 posted net income of $18.9 million for its third quarter ending May 31, a 30% jump compared to the same period last year. Net sales for its maintenance products also rose to $133.3 million, a 15% increase.

Diluted earnings per share reached $1.38 for the quarter, up from $1.07. San Diego-based WD-40’s fiscal year runs from Sept 1 to Aug. 1.

The company reported its net sales rose in all three regions: Americas; Europe, the Middle East and Africa; and Asia-Pacific. Sales increased 16% in the Americas to $71.1 million, primarily due to higher maintenance product sales in the United States, which increased 21% compared to last year, WD-40 said. Those increased sales were attributable to price increases, though slightly offset by lower demand.

Maintenance product sales also rose in Latin America by 18% as wholesale customers purchased higher levels of product in advance of planned price increases. These raises in the U.S. and Latin America were partially offset by lower sales of maintenance products in Canada, down 23%, due to weaker economic conditions in certain regions resulting in lower demand, the company said.

Net sales in EMEA rose 6% primarily due to price increases in all direct and distributor markets, though changes in foreign currency exchange rates had an unfavorable impact on sales for the segment. Direct market sales increased 2%, while distributor market sales increased 16%.

“This is the first time in four quarters that the company’s decision to suspend sales in Russia and Belarus did not negatively impact sales on a year over year basis,” WD-40 noted.

Asia-Pacific net sales increased 42% for the period, primarily attributable to higher sales of maintenance products in the Asia distributor markets and China, which increased 151% and 39%, respectively. In the same period last year, both markets were negatively impacted by the company being severely restricted from shipping products due to supply chain disruptions from COVID-19 lockdown measures in Shanghai, which did not occur this year. Higher prices also favorably impacted sales numbers in these sectors.

This was partially offset by sales in Australia, which decreased 14% mostly due to less sales volume of the company’s WD-40 Multi-Use Product, driven by weaker market and economic conditions, as well as unfavorable changes in foreign currency exchange rates, and the impact of sales price increases.

“As a global company with more than half of our revenue generated in currencies other than the U.S. dollar, we are exposed to the effects of changing foreign currency exchange rates,” WD-40 Company President and CEO Steve Brass in the company’s earnings release. “The impacts of changing foreign currency exchange rates have had a significant negative impact on our reported results in both the third [fiscal] quarter and year-to-date.”