Fuchs Petrolub AG reported that its net income for the first half of 2002 more than doubled from the same period of 2001, due to external and internal growth.
The Mannheim, Germany-based company, which stands to become the worlds largest independent lubricant producer when Shell Oil completes its acquisition of Pennzoil-Quaker State, said net income rose to Euro 12 million (U.S. $11.9 million), up from Euro 5.6 million during the first six months of last year. Earnings per share, after goodwill amortization, increased from Euro 2.1 to Euro 4.8.
First-half sales increased 13.5 percent to Euro 542.3 million. This included external growth of 10.6 percent, mostly due to the companys takeover of its former 50-50 German joint venture with RWE-DEA. Fuchs had internal sales growth of 4.3 percent, with currency translation accounting for a 1.4 percent decrease. Sales in Asia/Pacific and Africa grew 15.8 percent, to Euro 10.1 million, with most of the increase occurring in China and Australia.
Selling and administrative expenses rose more slowly than sales, allowing operating profit margin to improve from 6.8 percent to 8 percent. The company also benefited from a sharp drop in its tax rate, from 62.3 percent to 48.6 percent.
Capital expenditures in the first half were Euro 12.2 million, with major investments in plant equipment for a new facility in Kaiserslautern, Germany, and expansion of a grease plant in the United States. Fuchs employed 4,132 people as of June 30, up from 3,966 a year earlier. Of the total, 1,143 are employed in Germany.
With global lubricant recovering modestly from 2001, the company predicted that its own sales for the full year 2002 will surpass Euro 1 billion for the first time. It also predicted that this years net income will significantly exceed last years results.