Two European lubricant suppliers reported sizable improvements in their first quarter financial performance. Germanys Fuchs Petrolub AG said its net income for the three months ended March 31 was 51 percent higher than in the same period of 2003. Orapi, a French manufacturer of machine maintenance products, said its sales were up 27 percent.
Fuchs, which is based in Mannheim, Germany, said May 14 that it turned a profit of Euro 9.2 million in the first quarter, compared with a profit of Euro 6.1 million in the same period of last year. Sales rose 1.3 percent to Euro 266.9 million, drug down by unfavorable exchange rates. Management said the companys Asian and Australian subsidiaries grew fastest, although there was also considerable growth in Europe and the Americas.
Fuchs said that rising raw materials costs were more than offset by optimizing of cost structures and increased sales of higher-margin products. A 22 percent cut in financing expenditures also contributed to the bottom line.
The company, the worlds largest independent lubricant manufacturer, said it expects internal sales growth during the second quarter to erode as the euro continues to strengthen against the dollar. It expects net income for all of 2004 to grow at double-digit rates, in the neighborhood of the 31 percent gain recorded for 2003.
Earnings should remain high, even if the rate of increase [on a year-to-year basis] for the first quarter does not continue in subsequent quarters, the company said.
Orapi, which is based in Lyon, had sales of Euro 6.1 million for the period ended March 31, an increase of 27 percent from the first quarter of 2003. Sales from ongoing operations grew 4 percent, with the rest of the improvement stemming from the launch in France of Testron products.
A supplier of greases, lubricants, adhesives and other machine maintenance products, the company said it has set a target of increasing sales for the whole year by 20 percent, disregarding fluctuations in exchange rates.