Chinese blender Qingdao Copton Technology Co. posted a 10 percent gain in its first quarter compared to a year earlier. Koreas SK Lubricants has more than tripled its second quarter operating profit, owing to increased sales volume, while S-Oils base oil business earned 61 percent higher operating income.
Copton earlier this month released the results of its first quarter – its first earnings report produced since it listed on the Shanghai Stock Exchange in April. The Qingdao, Shandong-province-based blender recorded net profit of 30.6 million yuan (approximately U.S. $4.6 million), a growth of more than 10 percent from a year earlier and sales of around 203 million, or 12 percent higher than the prior years corresponding quarter.
Copton is a leading lubricant and grease company in China, which focuses on producing automobile lubricants as well as automotive maintenance products and antifreeze.
Founded in 1992, Copton raised 71.9 billion when it became one of the few listed lubricants company in China. The stock price of Copton was set at around 21 at the time of its initial public offering three months ago and has since tripled to around 66.
South Korean refiner SK Lubricants said in its quarterly earnings report last week that it posted profit of 133billion won (U.S. $117 million)for its base oils and lubricants business, a 320 percent jump from41.5billion won in the previous year.
Sales for its second quarter were653.3 billion won, a marginal drop from656billion won during the second quarter of 2015.
Compared to first quarter [this year], there was a slight dip in the base oil margin. However, this has been mostlyoffsetby the inventory gain impact, an SK official said in the report. In the first half of this year, we have achievedabout 90 percent of last years performance in terms of operating profit.SK Lubricants earned 295 billion won in operating profit in 2015.
The overall base oil market situation is quite favorable, he noted. In the first half of the year, there was about a 10 percent [increase] in volume. We expectthis growth in demand will continueto the second half of the year.
S-Oils quarterly operating income was 128 billion won (U.S. $112 million), a 61 percent increase from 79.6 billion won in 2015. The Seoul, South Korea-based base oil supplier said in its second quarter earnings report issued yesterday that its revenue shrank 7.4 percent to just under 346 billion won from 373.5 billion won a year earlier.
Despite lower sales revenue, S-Oils operating income was strong, thanks to around 37 percent of its sales being high-margin products, an S-Oil official said during the companys conference call with investors. The good result was mainly supported by stable and robust margins of high-quality products.
The spokesman explained that the spread for API Group I base oils dropped significantly but noted that Group III margins contributed to the quarter being profitable. S-Oil expects strong sales for Group III base oil to continue in the second half of the year, driven by demand in the United States and Europe. S-Oilsupplies mostly API Group II and Group III base stocks.