Stated-owned Thai Oil Group’s base oil business reported a major increase in net profit on lower sales revenue in the first quarter.
Thai Oil’s lube base oil business posted 284 million Thai baht (U.S. $8.9 million) in net profit for the first quarter, up 407 percent from 56 million baht in 2019’s first quarter.
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Lube base oil sales revenue was down 17.5 percent at 3.9 billion baht, from 4.7 billion baht in the year-earlier period.
According to Thai Oil’s earnings presentation, the price for its Group I base oil – based on ex-tank Singapore price – averaged U.S. $645 per ton for 500 solvent neutral in the first quarter. That was down 12.5 percent from a $737/t average in 2019’s first quarter.
The company’s management noted in its discussion and analysis that the base oil market in the first quarter was affected by several factors: the Covid-19 pandemic, lower imports from China during the Chinese New Year and cold weather causing lower demand for high viscosity base oil.
The plant in Si Racha, Thailand, posted a base oil production rate of 81 percent of name plate capacity during the first quarter, down from 89 percent in 2019’s first quarter. Base oil production volume for the quarter slipped to 54,000 metric tons, down 8.5 percent.
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.