Profits Down for Calumet, Up for Quaker

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Profits Down for Calumet, Up for Quaker

Calumet Specialty Products Partners LP reported a worse loss for the quarter ended Sept. 30, compared to the same period of 2019, while profits improved at Quaker Chemical and HollyFrontier.

Meanwhile Clean Harbors’ Safety-Kleen segment posted a decline in revenue and lubricants distributor Parkland Fuel brought in higher revenue.

Calumet

Indianapolis-based Calumet reported a $56.1 million net loss for the quarter ending Sept. 30, worse than a $4.6 million net loss in 2019’s third quarter.

Third-quarter sales for the company dropped to $568 million, down 39% from $929.6 million.

“The resilience and diversity of our core specialty business was again demonstrated with this segment generating both profit and margin growth year-over-year, as gross profit and adjusted gross profit per barrel improved 7.2% and 13.3%, respectively versus last year’s third quarter,” Calumet CEO Steve Mawer said in the company’s earnings news release.

Specialty product production volumes for the quarter declined 16% from the same quarter of 2019 to 20,404 barrels per day. Lubricating oils slid 6% to 10,634 b/d, while wax sales declined 17% to 1,199 b/d.

Production of packaged and synthetic specialty products – including finished lubricants and specialty chemicals products such as those from the company’s Royal Purple, Bel-Ray and Calumet packaging facilities – increased slightly to 1,485 b/d.

Quaker Houghton

Quaker Chemical – also known as Quaker Houghton – reported net income of $27.3 million for the third quarter, improving on a $13.1 million net loss in the year-earlier period.

Net sales reached $367.2 million, up 13% from $325.1 million. The increase was driven by additional sales due to the Conshohocken, Pennsylvania-based company’s August 2019 merger with Houghton International Inc. and its October acquisition of the operating divisions of Norman Hay.

Excluding net sales related to acquisitions, the company indicated third quarter net sales would have declined about 10% year-on-year, primarily due to an 8% decrease in sales volumes driven by the impact of COVID-19.

“While we have seen a rebound in many of our end markets, we are still not back to where we would have expected our business to be when we started the year,” Chairman, CEO and President Michael F. Barry said in the company’s earnings news release. “Looking forward, we expect gradual sequential improvement in our markets as we progress through the next two years, although given the uncertainty in our operating environment, the improvement by quarter is hard to predict.”

HollyFrontier

Dallas, Texas-based HollyFrontier’s lubricants and specialty products segment reported $43.7 million in income from operations for the third quarter, up 188% from $15.2 million in the year-earlier period.

The segment’s revenues from external customers declined to $452.9 million in the third quarter, down 14% from $529.6 million.

The lubricants and specialty products segment includes Petro-Canada Lubricants and its Mississauga, Ontario, refinery, which makes products such as base oils, white oils, specialty products and finished lubricants, along with specialty lubricants from HollyFrontier’s Tulsa refineries. Red Giant Oil Co. and Sonneborn are also part of the company’s lubricants and specialty products segment.

“Despite the difficult operating environment, HollyFrontier delivered solid results in the third quarter, led by resilient financial performances from our lubricants and midstream businesses,” HollyFrontier President and CEO Michael Jennings said in the company’s earnings news release.

Jennings noted that the COVID-19 pandemic caused a decline in U.S. and global economic activity starting in the first quarter of this year. “This decrease reduced both volumes and unit margins across the company’s businesses, resulting in lower gross margins and earnings,” he said. “During the third quarter of 2020, demand for transportation fuels remained challenged,

while lubricants and specialties saw meaningful improvement in industrial and transportation-related markets and increased global demand for base oils.”

Clean Harbors

Norwell, Massachusetts-based Clean Harbors’ Safety-Kleen segment – which includes oil rerefining – reported $281.1 million in third party revenues for the third quarter, down 18% from $341.4 million in the year-earlier period. Third-party revenues include the sales of base oil, blended products, reclaimed fuel oil and a small amount of other products.

“Safety-Kleen rebounded from the shelter-in-place restrictions that had severely disrupted customer demand in the second quarter of 2020,” Clean Harbors Chairman, President and CEO Alan McKim said in the company’s earnings news release. “In fact, on a year-over-year basis, revenue in our branch business was only off 6% in Q3 – much better than we anticipated.”

McKim noted that the lifting of local restrictions across much of North America led to an increase in vehicle miles driven, generating improved lubricant demand. “Based on the strength of the recovery in near-term demand for base oil and finished lube products, we restarted three rerefineries that were taken offline at the outset of the pandemic,” he said. The company operates four waste oil rerefineries in the United States – in Nevada, California, Kansas and Indiana – and one in Breslau, Canada.

“Given the declining market value of waste oil, we maintained high charge-for-oil rates for used motor oil and increased our collection volumes to 50 million gallons, 16% ahead of second-quarter levels,” McKim added.

Parkland Fuels

Canada-based distributor Parkland Fuel Corp. reported 106 million Canadian dollars (U.S. $81.3 million) in sales revenue for its lubricants segment in the third quarter, up 12% from CA$95 million in the year-earlier period.

That included CA$9 million sales revenue for the Canada Commercial segment, down 25% from CA$12 million. Canada Commercial delivers lubricants, oilfield fluids and other petroleum products to commercial, industrial and residential customers across Canada.

The international segment posted CA$16 million in sales revenue for the quarter, down 24%. The international segment consists primarily of the Sol business acquired in January 2019. Sol has operations in 23 countries, predominantly located in the Caribbean and along the northern coast of South America. It operates and services a network of retail service stations under brands such as Esso, Shell and Sol. The international business also serves commercial, industrial and aviation businesses.

The company’s USA segment reported CA$81 million in sales revenue, up 31% from CA$62 million. The USA segment delivers ExxonMobil and Ridgeline lubricants, chemicals, ancillary automotive products, and equipment to commercial, industrial, marine and wholesale customers through an extensive delivery network in the regions in which Parkland operates. U.S. distributors acquired by Parkland last year included Florida-based distributor Tropic Oil Co., Montana-based Mort Distributing Inc. and Ken Bettridge Distributing Inc. of Utah.