Stated-owned Thai Oil Group’s base oil business posted a massive jump in net profit for the fourth quarter of 2019, and a slight decrease in net profit for the full year. Revenue for the base oil business was down for the fourth quarter and full year.
Thai Lube Base Plc. posted 502 million baht (U.S. $15.2 million) net profit for the fourth quarter, jumping up 246 percent from 145 million baht in 2018’s fourth quarter. For the full year, net profit edged down 0.1 percent to 1.1 billion baht.
Get alerts when new Sustainability Blog articles are available.
The base oil subsidiary reported 4.4 billion baht in revenue for the fourth quarter, down 25.5 percent from 5.9 billion baht. The company attributed the decrease mainly to lower average product selling price.
For the full year, its revenue declined to 18.2 billion baht, down 13 percent from 21 billion baht. That was mainly because of both lower average product selling price and lower total product sales volume, the company said a management discussion and analysis presentation of its earnings.
The company operates a base oil plant with 267,000 metric tons per year (5,100 barrels per day) of API Group I production capacity. The base oils are mainly used in industrial and marine lubricants and in engine oils for older engines.
The plant in Si Racha, Thailand, posted a base oil production rate of 77 percent of name plate capacity during the fourth quarter last year, down from 86 percent in 2018’s fourth quarter. The full-year base oil production rate of 83 percent was down slightly from 84 percent for 2018.
According to the earnings presentation, the price for its Group I base oil – based on ex-tank Singapore price – averaged U.S. $659 per ton for 500 solvent neutral in the fourth quarter. That was down almost 19 percent from an $812/t average in 2018’s fourth quarter. The average price of $693/t for the full year was down 20.4 percent from $871/5 for 2018. The company attributed the decreases to a continuous drop in demand from a sluggish world economy due to the prolonged United States-China trade war, along with additional supply from a new Group II base oil plant in China.