GS Caltex reported increased operating profit for its base oil and lubricant business, and KH Neochem Co. poster lower operating profit for its performance materials segment, which includes raw materials for refrigeration lubricants, for the first quarter. Meanwhile, 2019 financial year profit was up for lubricant company Yushiro Chemical Industry.
GS Caltex of South Korea reported operating profit of 67.2 billion South Korean won (U.S. $54.7 million) for its base oil and lubricant business in the first quarter, up almost 362 percent from 14.6 billion won in 2019’s first quarter.
Revenue for the quarter declined 2.6 percent to 317.8 billion won, down from 326.1 billion won.
The 50-50 joint venture of GS and Chevron has capacity to produce 26,000 barrels per day of base oil at its plant in Yeosu and 9,000 b/d of finished lubricants at its blending plant in Incheon.
Japanese specialty chemical producer KH Neochem Co. reported that a slowdown in demand for refrigeration lubricant raw materials contributed to a decrease in revenue and profit for its performance materials segment. The segment posted ¥1.8 billion in operating profit, down 0.5 percent from 2019’s first quarter. The segment’s net sales declined by 15 percent to ¥8.3 billion (U.S. $77.7 million), down from ¥9.8 billion.
The company noted in its quarterly earnings filing the Covid-19 pandemic’s impacts on its businesses, explaining that the sudden global economic downturn led to lower corporate production activities and stagnant personal consumption. According to KH Neochem, factors impacting the performance materials segment in the first quarter included a decrease in air conditioner demand and a slump in inbound tourism, department store and travel retail sectors sales.
The company specializes in oxo reactions that produce alcohols and esters along with derivatives such as 2-ethylhexanoic acid and isononanoic acid, which it sells as raw materials for lubricants. It also makes fatty acids, esters and feedstocks for niche lubricants used in refrigeration compressors.
Metalworking fluids and industrial oil producer Yushiro Chemical Industry reported sales of 37.3 billion Japanese yen (U.S. $348.3 million) for its fiscal year, which was from April 1 through March 31. That’s up 6 percent from ¥35.2 billion in the prior fiscal year.
Fiscal year net profits increased almost 11 percent to ¥1.9 billion, up from ¥1.7 billion.
The company noted in its financial statement that during its fiscal year, the global economy became more uncertain. One reason cited was the slowdown of China’s economy, due to United States-China trade friction and the impacts of Brexit. Despite those factors, the company said sales were up year-on-year, mainly due to the positive influence of U.S.-based QualiChem, which Yushiro acquired in 2018.
In Japan, domestic automobile production was down and exports of automobile parts to the United States and China also declined. As a result, Yushiro’s sales in Japan decreased 4.9 percent to ¥17.1 billion, compared to the previous fiscal year. Its profit in Japan decreased 8.7 percent to ¥759 million.
In China, factors such as U.S.-China trade friction and a decrease in the number of automobiles produced resulted in the company’s fiscal year sales declining more than 11 percent year-on-year to ¥4.3 billion. Profits in China also decreased, by almost 35 percent year-on-year to ¥287 million, which Yushiro attributed to the effects of soaring raw material prices and rising personnel costs.
Segment income increased almost 11 percent year-on-year in Southeast Asia and India combined to ¥593 million, which the company attributed to cost reductions in Thailand. Yushiro’s sales in Southeast Asia and India combined decreased 4.4 percent year-on-year to ¥4.6 billion. The company experienced decreased revenues in Thailand and Malaysia in Southeast Asia, citing a decrease in automobile production due to the U.S.-China trade friction and sluggish exports of automobile parts. Yushiro noted that sales in India also declined due to the impact of the Covid-19 pandemic. On the other hand, the company said, sales in Indonesia increased because of an increase in sales to existing customers despite a decrease in domestic automobile production.