S-Oil reported much higher operating income for its base oil business, SK Lubricants posted a large jump in operating profit, and Pakistan-based blender Hi-Tech Lubricants Ltd. reported higher consolidated net profit for the quarter ending Sept. 30.
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S-Oil’s base oil business reported third-quarter operating income of 288.8 billion won (U.S. $247.2 million), a 199% jump from 96.6 billion won. Sales revenue for the quarter grew 168% to 711.2 billion won.
The base oil spread retreated from its historic record level in the second quarter due to the restart of base oil plants after maintenance, S-Oil said in its earnings presentation. The company noted that price spreads in Asia between base oil and high-sulfur fuel reached a historic $81.90 per barrel in the second quarter before slipping to $73.30/bbl in the third quarter. “But Group III products’ spreads continued to be wider on the back of firm demand for high quality products,” the company added.
S-Oil makes API Group II and Group III base oils at its plant in Onsan, South Korea. The spread that the company cited is an aggregated number that also entails Group I base oils.
SK Lubricants reported 329.3 billion won in operating profit for the third quarter, a 366% increase from 70.6 billion. The operating profit was backed by increases in sales prices and margin as well as stronger sales, the company noted in its performance analysis.
Sales increased 51% to 912.2 billion won, up from 602.3 billion.
The company said it expected a seasonal demand decline and supply increase to likely ease supply and demand mismatch during the fourth quarter. The company makes Group II and III base oil at its plant in Ulsan, South Korea. The SK-Pertamina joint venture makes Group III base oil in Dumai, Indonesia, and the SK-Repsol joint venture produces Group II and III base oil at a plant in Cartagena, Spain.
Net profit for the Lahore-based company increased 17% to 104.4 million Pakistan rupees (U.S. $606,583) for the quarter – the first of the company’s fiscal year – up from Rs 89.3 million in the same period last year.
The company’s other income for the quarter reached Rs 17.7 million, up 27% from Rs 13.9 million.
Net sales revenue in the quarter ending Sept. 30 jumped 72% to Rs 3.1 billion, improving from Rs 1.8 billion. Hi-Tech Blending (Private) Ltd., the company’s wholly owned subsidiary, started local blending of Fighter Brands – in-house production of South Korea’s SK Lubricants’ Zic lubricants – in November 2018.