Moresco Reports Higher Earnings


Moresco Reports Higher Earnings

Japanese specialty lubricant manufacturer Moresco Corp. reported higher sales of specialty lubricants and lower sales of synthetics oils for its first fiscal quarter, which ended in May, citing as a key factor the continued rebound of Japan’s automotive production.

Sales of specialty lubricants increased 25% to ¥3.1 billion (U.S. $28.3 million) for the quarter ending May 31, improving from ¥2.5 billion in the year-earlier period.

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The company noted in its explanation of specialty lubricants business results that Japan’s domestic automobile production remained on a recovery trend during the quarter, although the shortage of semiconductor supply remained a hindrance. Sales of sulfonate, used as an additive in metalworking fluids, increased due to the recovery in the automobile production sector. Sales of cutting fluids and hot forging lubricants, which Moresco said it intended to expand, were strong during the quarter.

Revenue from synthetic oils declined 4% to ¥503 million for the quarter, down from ¥525 million, the company said.

Moresco said sales of its high-temperature synthetic lubricating oils benefited from the recovery of domestic automobile production and strong demand in China.

The company cautioned that domestic demand for its products overall – including such products as hot melt adhesive, materials and energy device materials – had deteriorated during the quarter due to the country’s implementation of epidemic prevention measures to help contain the spread of COVID-19. Moresco noted that while it expected demand for hard drives for data center applications to increase in the medium term, the ongoing replacement of magnetic hard disk drives with solid state drives continues to impact its hard disk surface lubricant sales.

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