Profits Surge at Hyundai Shell, GS Caltex

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Profits Surge at Hyundai Shell, GS Caltex

South Korea’s Hyundai Shell Base Oil and the GS Caltex base oil and lubricant business both reported much higher operating profit and sales for the fourth quarter and full year 2021, compared to the same periods in 2020.

Profits fell for several companies in India – Tide Water Oil Co., Savita Oil Technologies Ltd. and Continental Petroleums Ltd. – but rose for Indian base oils and lubricants trader Maximus International.

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Hyundai Shell Base Oil

Hyundai Shell Base Oil, the joint venture between Hyundai and Shell, reported operating profit for its base oil segment of ₩46.4 billion (U.S. $38.8 million), a 31% increase from a ₩35.4 billion operating profit in the same period in 2020. Sales for the segment in the quarter more than doubled to ₩315.4 billion, a 123% jump.

For the full year, the segment operating profit more than tripled to ₩301.4 billion, a 207% jump from ₩94.7 billion in 2020. Sales for the full year reached ₩1.1 trillion, a 99% increase from ₩571.2 billion.

Hyundai Oilbank, which owns 60% of the joint venture, said in its earnings presentation that the base oil price spread narrowed sequentially in 2021’s fourth quarter – compared to the wider margins in the first three quarters of last year – due to an increase in oil refinery run rate and the end of regular maintenance.

The 60-40 joint venture between Hyundai Oilbank and Shell produces only API Group II base oil at its plant in Daesan, South Korea.

The spread in the fourth quarter for API Group II 150 neutral oil was $138 per metric ton, a 21% decrease from the same period in 2020. The spread for Group II 500 neutral base oil was $373/t in the fourth quarter, 26% higher than in 2020’s fourth quarter.

In its outlooks for the first and second quarters of this year, the company expressed optimism that the base oil price margin would recover as spring season arrives and a projected seasonal decrease in base oil supply due to spring maintenance season.

The spread in the third quarter for its API Group II 150 neutral oil was $85 per metric ton, up 81% from last year’s third quarter. The spread for its Group II 500 neutral base oil was $219 in the quarter, up 271%.

GS Caltex

GS Caltex reported operating profit of 108.4 billion South Korean won for its base oil and lubricant business in the fourth quarter of 2021, a 43% jump from ₩75.9 billion. Revenue for the quarter rose was up 62% at ₩451.7 billion won.

For the full year, the base oil and lubricant business’ operating profit more than doubled to ₩567.4 billion, a 116% increase. Full-year revenue was 46% higher at ₩1.7 trillion, compared to 2020 results.

The 50-50 joint venture of GS and Chevron has capacity to produce 1.3 million metric tons per year of API Group II and Group III base oil at its plant in Yeosu and 9,000 b/d of finished lubricants at its blending plant in Incheon.

Tide Water Oil

Standalone profit for Kolkata-based Tide Water Oil slipped 20% to Rs 29.3 crore (293 million Indian rupees or U.S. $3.9 million) for the quarter, falling from Rs35.3 crore in the same period in 2020.

The company, which manufactures and distributes Veedol-branded lubricants, said revenue from operations increased 11% to Rs 348.1 crore. Total expense for the quarter increased 14% to Rs 32.5 crore.

Savita

Savita Oil, headquartered in Mumbai, reported net profit of Rs 56.5 crore for the quarter ending Dec. 31, a 30% drop from Rs 81.1 crore.

Savita’s total income for the quarter jumped 37% to Rs 747.4 crore. The company’s revenue from petroleum products rose 39% to Rs 740.3 crore, up from Rs 531.5 crore.

Maximus

Vadodara, Gujarat-based Maximus International reported consolidated net profit of Rs 102.6 lakh (Rs 10.3 million), improving 36% from Rs 76 lakh for the quarter ended Dec. 31.

The company said that consolidated revenue from operations increased 9% to Rs 15.2 crore for the quarter, compared to Rs 14 crore.

Its other income for the quarter declined 12% to Rs 16.5 lakh, the lubes and base oil trader said in its regulatory filing.

Total expenses for the quarter rose 7% to Rs 14.3 crore, rising from Rs 13.4 crore.

Continental

Jaipur-based lubricant and grease seller Continental Petroleums reported that net profit dropped 41% to Rs 84.1 lakh for the quarter ended Dec. 31, declining from Rs 143.4 lakh.

Total income, including revenue from operations and other operating income, was up slightly at Rs 31.3 crore, while total expenses declined 2% to Rs 29.9 crore.

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