S-Oils base oil business and MJL Bangladesh Ltd. both reported year-on-year improvements in third quarter revenue and profits. S-Oil also stated that falling costs for crude feedstock were helping offset the impact of a base oil capacity glut.
S-Oil reported a third quarter operating profit of 67.5 billion South Korean won (U.S. $64.2 million) for its base oil business, up 68 percent from 40.2 billion won a year earlier. Sales increased 10 percent to 490.6 billion won from 446.7 billion.
The Seoul-based refiner said in its earnings presentation that base oil margins continued an upward trend due to increased automobile sales in major lube markets and weakened feedstock prices, though it noted that supply from new capacity additions limited the margin increase.
In its outlook for the fourth quarter, the company said, Demand growth for high quality products in Asia and South America and weakened feedstock prices will support the margin at a decent level despite downward pressure from new capacity additions in 2014s third quarter.
MJL posted a net profit of 310 million taka (U.S. $4 million) for the three months ended Sept. 30, an increase of 36 percent from the same period of 2013. Sales revenue jumped 19 percent to 2.4 billion taka, while costs rose by the same percentage to 1.7 billion taka.
The Dhaka, Bangladesh-based company manufactures and markets Mobil-branded lubricants on behalf of ExxonMobil while also making and selling its own brands of lubes. For the first nine months of 2014, it said, revenue from domestic sales of its own brands climbed 9 percent to 2.6 billion taka. Sales revenue for Mobil-branded domestic sales increased 17 percent to 2.9 billion taka.
Export lubricant sales revenue fell 28 percent to 41 million taka.