Thai independent lubricant manufacturer P.S.P. Specialties Public Co. reported a 24% jump in net profit despite a 7% decrease in sales revenue for the quarter ended Sept. 30, noting how a decrease in prices for raw materials helped increase gross profit.
Net profit rose to ฿139.5 million (U.S $4.1 million) in the third quarter, compared to ฿112.9 million, which the company said was the result of an increase in gross profit, gain from exchange rate – including a decrease in cost of sales and services – offset by an increase in financial costs.
PSP said its gross profit increased 2% to ฿377 million in the third quarter, from ฿369 million, while gross profit margin increased to 12% for the quarter, compared to 11%. “The increase in gross profit and gross profit margin was mainly due to the decrease in the price of newly purchased raw materials, including the decrease in overhead costs of production,” the company said in its earnings management discussion and analysis.
The company’s third-quarter sales revenue decreased to ฿3.1 billion, down from ฿3.4 billion. PSP attributed the decline mainly to a decrease in the average selling price per unit, both domestic and export. “However, the sales volume increased by 2% compared to the same period last year,” the company added.
The company has production capacities of 212 million liters (191,000 metric tons) per year for lubricants, 27,548 tons per year for grease, 44 million liters per year for rubber process oil and 25 million liters per year for transformer oil. PSP also has a lubricant blending plant in Thilawa Special Economic Zone A, Yangon, Myanmar, owned by its subsidiary, Pacific-PSP Syntech Co., Ltd.
PSP distributes Chevron Oronite’s additives in Thailand, Cambodia and Laos and serves as sole distributor for Authentix, an international product inspection and certification service provider based in the United States.
PSP has distribution centers with warehouses and provides raw material sourcing, including base oil, product design, blending, packaging, storage, and sea and air logistics and distribution.