Q3 Mixed for Afton, SK Lubricants


NewMarkets Afton Chemical additives subsidiary saw an increase in operating profit and a slight decrease in revenue, while South Korean base oil refiner SK Lubricants experienced a decrease in operating profit and a a rise in sales for the quarter ending Sept. 30, compared to the year-earlier quarter.

Afton Chemical
Afton Chemical posted operating profit of $96.3 million in the quarter ending Sept. 30, up 15 percent from $84.1 million in the year-earlier quarter, excluding a $38.7 million gain on legal settlement in 2011s third quarter. Additives segment revenue reached $547.7 million, down less than 1 percent from $552 million in the year-earlier quarter.

Our petroleum additives business continues its strong performance, said NewMarket President and CEO Thomas E. Gottwald. Our customer-focused solutions and technology-driven product offerings are two of the key fundamentals of our continued success. We continue to increase our investment in research and development as evidence of our commitment to these goals.”

As a whole, Richmond, Va.-based NewMarket reported net income of $64.7 million, or $4.83 per diluted share in the third quarter. That is down 9.4 percent from net income of $71.4 million, or $5.22 per share, in the year-earlier quarter.

SK Lubricants
For SK Lubricants, operating profit for the quarter ending Sept. 30 fell to 106.5 billion won (U.S. $97 million) from 198.5 billion won a year ago, a decrease of 46.4 percent. Sales, however, rose to 771.5 billion won from 694.3 billion won, an 11.1 percent increase.

SK of Seoul operates base oil refineries in Ulsan, South Korea, that have 31,000 barrels per day API Group II and III capacity, including a joint venture with JX Nippon Oil. The SK-Pertamina joint ventures base oil plant in Dumai, Indonesia, has 7,000 b/d Group III capacity.

In its analysis of its third quarter earnings, the company pointed out a correction in base oil prices that reflected lowered crude oil prices in the second quarter. SK Lubricants also said its third quarters sequential increase in operating profits, compared to 85.2 billion won in the second quarter, was due to higher sales volume with the commencement of the joint venture base oil plant with JX Nippon Oil.

Base oil prices [are] expected to remain bearish with economic slowdown driving down the demand, SK lubricants said in its earnings presentation.

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