Michang Reports Lower Earnings


Michang Reports Lower Earnings

South Korean lubricants blender Michang Oil reported a 2% decline in net profit and a 1% decrease in sales for the fourth quarter of last year, while full-year 2022 net profit dropped 29% on a 3% increase in sales.

Michang reported that net profit slipped to ₩10.7 billion (U.S. $8 million) for the quarter ended Dec. 31, compared to the same period in 2021. Operating profit rose 16% in the quarter to ₩13.1 billion, from ₩11.2 billion.

For full-year 2022, Michang reported ₩23.4 billion in net income, a steep drop from ₩33.1 billion in 2021. Operating profit for last year climbed 24% to ₩44 billion, down from ₩35.4 billion.

Sales in the fourth quarter edged down to ₩112 billion, while Michang’s sales for 2022 increased 3% to ₩418.8 billion.

Michang produces automotive, marine and industrial lubricants, along with transformer oils and process oils, among other products. The company said in its full-year product sales breakdown that lubricants for applications such as machine tools, ships and automobiles accounted for ₩309.8 billion in sales, or about 74% of the company’s overall sales last year. Rubber compounding oils accounted for about 18% of sales and electrical insulating oils for transformers comprised about 4% of sales.

Its earnings report also breaks out performance for products by kiloliters sold and sales revenue during full-year 2022. Michang produced 184,833 kiloliters (166,000 metric tons) of lubricants during last year, a 13% decline from 211,447 kL in 2021. The ₩309.8 billion in lubricant sales in 2022 was a 1% increase from ₩307.7 billion in the previous year.

The total for last year included 115,012 kL lubricants exported, a 16% decline from 136,813 kL. Export lubricant sales decreased 6% to ₩173 billion, compared to ₩185 billion.

Domestic consumption of Michang’s lubricants decreased 6% to 69,821 kL, compared to 74,634 kL. Domestic lubricant sales climbed 12% to ₩136.8 billion, from ₩122.7 billion.

Michang produces automotive lubricants, transformer oils, white oils, rubber process oils and fuel additives at its plant in Ulsan. Its plant in Busan produces the same products – except for fuel additives – along with marine lubricants.

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