Thai Oil Group’s base oil business suffered steep declines in net profit and sales revenue for the third quarter due in part to shrinking profit margins.
Meanwhile, profits plummeted in the quarter for Chevron Lubricants Lanka Plc and Lanka IOC.
Thai Oil
Thai Oil reported that net profit for its lube base oil business plunged 80% to 254 million baht net for the quarter ended Sept. 30, compared to 1.3 billion baht.
Lube base oil sales revenue declined 18% to 6.4 billion baht, from 7.8 billion baht. The company noted the decrease occurred as product selling prices plummeted following a decline in global oil price. “Product spreads declined following concerns over weakened demand and lower seasonal demand,” the company said in its management’s discussion and analysis of the third-quarter earnings.
The company also attributed the decline in price and spread to stagnant Chinese economic activities and rainy season suppressing demand for lubricant in the region. Base oil supply also increased during the period as some refineries resumed production in the region, the company added.
According to Thai Oil’s earnings analysis, the average price for Group I base oil – based on ex-tank Singapore price – was $959 per metric ton in the third quarter, compared to $1,272/t in the same quarter last year. The spread over high sulfur oil was $442 in the third quarter, well down from $798/t.
The company’s Si Racha, Thailand’s API Group I base oil production rate was down to 79% in the third quarter, compared to 83%, and production was down at 53,000 metric tons, from 55,000 tons. The company also attributed the lower sales revenue to this lower base oil production rate, following group optimization production planning.
Chevron Lubricants Lanka
Chevron Lubricants Lanka reported a 38% decline to 902.6 million Sri Lankan rupees (U.S. $2.8 million) net profit for the third quarter, compared to Rs 1.5 billion. Operating profit declined 19% to Rs 1.3 billion.
Sales revenue increased 2% to Rs 6.1 billion.
Chevron Lubricants Lanka imports, blends, distributes and markets lubricants and greases, and operates a blending plant in Sapugaskanda.
Lanka IOC
Lanka IOC said its net profit dropped 59% to Rs 5.1 billion, compared to Rs 12.4 billion for the quarter ended Sept. 30, the second quarter of its fiscal year. Its operating profit also fell, by 63%, to Rs 5.2 billion, compared to Rs 14.2 billion.
The company’s sales declined 30% to Rs 61.7 billion, compared to Rs 88 billion.