German independent lubricants blender Fuchs Petrolub SE issued a preliminary report last week showing a 17% decrease earnings and an 11% decline in sales revenue for the first nine months of the year.
The company preliminarily estimated that sales decreased to €1.7 billion (U.S. $2 billion) for the period between January and September. Earnings before interest and taxes fell to €203 million. Operating business in the third quarter, especially in September, was significantly above expectations, the company said.
The company said it revised its outlook for financial year 2020, taking into account the business development in the first nine months of 2020 and based on a current assessment of the impact of the COVID-19 pandemic. “Fuchs expects a further improvement in economic conditions in the fourth quarter and therefore expects in the year 2020 a decline in earnings – EBIT – in the range of 15%,” the company stated in its news release on preliminary earnings. The previous outlook forecast a 25% decline.
“The effects of the crisis on supply chains, production and customer demand cannot be reliably estimated currently,” the company stated. “The new outlook is based on the assumption that there will be no major lockdowns in the fourth quarter of 2020 in Fuchs’ core regions.”
The company said it is well positioned to face the crisis and has a solid financial basis. “The stability and structure of the balance sheet form a sound foundation for further development,” Fuchs stated. “Both the low proportion of fixed costs and the high proportion of raw materials have a positive effect. This allows us to breathe flexibly with sales. In addition, Fuchs once again benefits from its worldwide presence and broad product portfolio.”