Thai Oil Group’s base oil business achieved higher net profit on lower sales revenue for the second quarter – a sales decline that the company blamed on slow demand growth and adverse weather impacts on transportation and driving activities.
Meanwhile, profits plunged 90% in the first half of the year for Singapore’s AP Oil, and Vietnam’s PV Oil Lube Joint Stock Co. reported a 93% jump in profit for the year’s first half.
Thai Oil
State-owned Thai Oil reported 576 million baht (U.S. $16.4 million) in net profit for its lube base oil business in the second quarter, compared to 549 million baht in the same period last year.
Lube base oil sales revenue fell 22% to from 8.4 billion baht to 6.6 billion baht.
The company said that the average price for API Group I 500 solvent neutral base oil and its spread over fuel oil declined in the second quarter, compared to the same period last year, as the market was pressured by slow demand growth, especially from China. Thai Oil added that the rainy season hindered transportation and driving activities late in the second quarter, although it added that demand for Group I was somewhat supported by some plant maintenance.
According to its earnings analysis, the average price for Group I base oil – based on ex-tank Singapore price – was $1,027 per metric ton for 500 solvent neutral, compared to a $1,274/t average in 2022’s second quarter. The spread over high sulfur foil was $588/t in the second quarter, compared to $608/t.
The Si Racha, Thailand, plant’s production rate declined to 83% of nameplate capacity in the second quarter, compared to 90% during the same period of 2022. Base oil production decreased 8% to 55,000 metric tons.
The company operates a base oil plant with 267,000 metric tons per year of API Group I production capacity. The base oils go mainly into industrial and marine lubricants and in engine oils for older engines.
AP Oil
Singapore’s AP Oil reported that its net profit plunged to S$107,000 (U.S. $79,000) for the first half of this year, compared to S$1 million for the same period last year.
Sales revenue declined 33% to $20.8 million for the six-month period, from S$31.1 million. AP oil attributed the decrease mainly to an $S6.7 million drop in trading revenue and an S$3.7 million decline in manufacturing revenue.
“Lower market demand led to pressure on selling prices, resulting in challenging market conditions for the group in the first half of 2023,” AP Oil said in its earnings announcement. “This business environment is likely to persist [until end ofc the year.”
Gross profit fell 30% to S$3.3 million, which the company said was due mainly to the drop in revenue.
PV Oil Lube
PV Oil Lube’s profit after tax jumped 93% to 775.9 million dong (U.S. $33,000) for the first half of this year, compared to ₫402.6 million.
Net profit from business activities surged 145% to ₫701.2 million, improving from ₫286.7 million. Net sales revenue increased 2% to ₫207.9 billion. PV Oil Lube produces and trades lubricating grease products and specialized lubricants, including engine, hydraulic and transmission oils. The company also offers consulting, providing lubrication solutions and technical services. It is a public joint stock company majority owned by Vietnam Oil Corp.