Independent lubricant blender Fuchs SE reported 9% higher net profit on a 4% increase in sales revenues in 2023, as raw material markets normalized after two years of much higher raw material costs, while its net profit rose despite lower sales in the fourth quarter.
The Mannheim, Germany-headquartered company reported earnings after tax of €283 million (U.S. $309 million) for the full year, improving from €260 million in 2022. Full-year sales revenue increased to €3.5 billion, from €3.4 billion.
For the full year, Asia-Pacific and the North and South America regions showed the largest increases in sales revenues.
Sales revenue in Asia-Pacific increased 5% to €979 million, which the company said represented a rebound after a difficult year in 2022. “Australia was the main contributor to the region’s growth,” Fuchs said in its annual report, while adding that China – still hampered by numerous lockdowns and consequences of the COVID-19 pandemic in 2022 and at the beginning of 2023 – also picked up again in 2023’s second half. “The encouraging development of recent years continued in 2023 in India and the smaller, fast-growing companies in East-and Southeast Asia,” the company noted.
Sales revenue also increased by 5% in North and South America to €687 million. “In addition to Brazil and the United States, due to positive business expansion, Mexico in particular was able to report increases in sales revenues, thus contributing significantly to the overall growth of the region,” Fuchs noted.
In its largest market – Europe, Middle East and Africa – the company reported that sales were flat at €2 billion. “Despite the general difficult economic environment, the adjustments in sales prices that were needed back in 2022 were largely sustained, allowing the vast majority of countries to increase growth in sales revenues,” Fuchs said in its annual report. “In particular, Poland, the United Kingdom and France recorded high absolute and relative increases. The overall sales revenues of the region were negatively affected by a decline in sales with other regions.”
Fuchs Chairman of the Board Stefan Fuchs said in the company’s letter to shareholders in its annual report that, “while the previous two years were marked by extraordinary increases in raw material costs and considerable availability problems, raw material markets normalized in the past year. This eliminated the ripple effect of inflation of prices and allowed us to concentrate fully on business development again. In particular the Europe region performed very well. North America achieved double-digit growth in local currency. In China, the market recovered in the second half of the year.”
In the fourth quarter, earnings after tax rose 5% to €64 million. Sales in the quarter decreased 3% to €843 million.
Asia-Pacific was the lone fourth-quarter sales bright spot, with sales climbing 8% to €241 million. In Europe, Middle East and Africa, sales fell 10% to €475 million, compared to €525 million. Sales revenue in North and South America decreased 4% to €164 million.