Panama Petrochem Ltd. bucked the trend of Indian lube suppliers recording shaky first quarters this year, reporting a 56 percent increase in earnings. Yips Chemical of Hong Kong came out of its half-year period with a loss, albeit a milder one than the year before.
Yips Chemical Holdings Ltd. narrowed its lubricants segments operating loss to approximately HK $450,000 (U.S. $57,500) during the first half of the year.
The Hong Kong-based lube supplier expanded its higher-tier automotive engine oil business in the period ending June 30. Despite an increase in raw material prices, the firm said in a filing last week that it had increased its gross profit margin for the product category.
Strict business management procedures contributed to significant savings, which it funneled into efforts to revitalize its Hercules brand, it said. The management will continue to reinforce the brand image of Hercules lubricants and its position in the automotive engine oil market while strengthening distribution channels in order to capture more customers and a greater market share.
Yips also deals in solvents, coatings and inks.
Indias Panama Petrochem Ltd. posted a consolidated net profit of Rs 14.5 crore (Rs 145 million, or U.S. $2.2 million) in the April to June 2017 period, up from Rs 9.3 crore last year, according to a regulatory filing.
The maker of Panol-branded lubricants said the increase was due primarily to increased sales. The volume in this quarter was 46,000 tons, compared to 35,000 tons in the same period last year, Joint Managing Director Hussein Rayani told local media. Revenue surged 51 percent to approximately Rs 296 crore.
In addition to automotive oils, transformer oils, industrial oils and greases, the companys consolidated figures include earnings from its more than 80 specialty petroleum products used in the production of ink, resin, textile, rubber, pharmaceutical, cosmetic, power, cable and other industrial applications.
The company imports about 80 percent of its raw materials for lubricants. It exports about 50 percent of its total production volume, and international sales grew about 86 percent to Rs 93 crore. Total expenses increased 50 percent to approximately Rs 274 crore.
Rayani said the companys sales will likely hit Rs 1,000 crore this fiscal year, while net profit could be between Rs 60 crore and Rs 65 crore.
Panama Petrochem also has procured land to expand production capacity for all its product types. This year we have plans for additional 30,000 tons of expansion, Rayani said. We are looking at a capex of Rs 60 crore in the next two to three years, he concluded. All would be [met] through our internal accruals.