Independent lubricants blender Fuchs Petrolub SE reported a decrease in profits and an increase in sales for the second quarter, compared to results in last year’s second quarter. Rising raw material prices impacted profits, while strong growth in sales in North and South America offset a decline in China.
Earnings after tax for the company, based in Mannheim, Germany, decreased 7% to €62 million (U.S. $63.6 million) for the quarter ending June 30, compared with €67 million in the same quarter last year.
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Sales after consolidation costs increased 17% to €832 million, rising from €714 million. Among regions, sales grew 17% to €506 million in Europe, Middle East and Africa; edged up 3% to €217 million in Asia-Pacific; and jumped 41% to €159 million in North and South America.
“While our business in China declined under the zero-COVID strategy, the North and South America region showed stable development,” Stefan Fuchs, chairman of Fuchs Petrolub’s executive board, said in the company’s earnings news release on results for the first half of this year. “The EMEA region, which is important for us, also delivered a high-value contribution.”
Fuchs noted that “the escalating war in Ukraine and the resulting pressure on raw material and food prices on the one hand, and ongoing pandemic-related disruptions, particularly in China, and bottlenecks in global supply chains on the other, are weighing on global economic activity and the business development of Fuchs, as is rising inflation.”
Raw material price dislocations have continued during 2022, Fuchs said in its earnings presentation. Although it doesn’t buy crude oil, the company explained that higher feedstock costs, combined with good base oil demand, have led to higher base oil prices this year, with base chemical and additive prices also rising.