Lubrizol Corp.’s pre-tax profit for the second quarter fell 25% year to year due to the fact that earnings in the same period of 2022 were inflated by insurance recoveries connected to fires at two of its factories, parent company Berkshire Hathaway reported.
Disregarding those recoveries, the chemical company’s pre-tax profit increased compared to the second quarter of 2022, according to Berkshire’s most recent financial report, although it did not state the amount of the increase nor the pre-tax earnings totals for either period.
Meanwhile, Canadian quick lube service business Mr. Lube posted a 23% increase in sales revenue and a slightly lower same-store sales growth for the second quarter, parent company Diversified Royalty Corp. reported.
Lubrizol
The company’s lubricant additive production plant in Rouen, France, was heavily damaged by a fire in September of 2020. Nine months later another fire destroyed its grease and chemicals factory in Rockton, Illinois.
Berkshire credited increases in the prices of Lubrizol’s own products and a more favorable product mix with allowing the profit improvement – excluding insurance recoveries. The benefits of those factors more than offset a reduction in sales volumes, higher operating expenses and the negative impacts of a stronger United States dollar.
Second quarter revenue dropped 5.5% to $1.6 billion. Sales volumes dropped due to temporary maintenance shutdowns that were unplanned along with general weakness of the global economy. Berkshire did not indicate whether unplanned shutdowns were at plants making lubricant additives or other types of chemicals that the company supplies.
Lubrizol is based in Wickliffe, Ohio, and is one of the world’s largest lubricant additive suppliers.
Mr. Lube
Sales revenue for the Mr. Lube business rose to $7.6 million for the quarter ended June 30, compared to $6.2 million in the same period last year. Although Diversified Royalty has six other royalty partners, Mr. Lube accounted for 49% of its total sales revenue in the second quarter.
The second quarter marked the third consecutive quarter of year-on-year sales revenue growth, preceded by a 17% increase to $6.7 million in last year’s fourth quarter and a 20% rise to $5.8 million in the first quarter this year.
The quick lube business generated same-store sales growth of 21% for its quick lube locations in the royalty pool for its parent company, compared to 24%. The growth in the quarter was primarily due to sustained growth across all of Mr. Lube’s offerings, the parent company said, especially in its maintenance, oil packages and tire sales offerings.
Mr. Lube is Canada’s largest quick lube brand and has more than 170 locations.