Financial results for the quarter ending Dec. 31 saw lubricant blender Valvoline on the rebound, and a strong fourth quarter and full year for the lubricants division of South Korean base oil refiner SK Corp.
Valvoline parent company Ashland said the lube blender recorded operating income of $18.2 million for the three months ended Dec. 31 – the first quarter of Ashlands 2007 fiscal year – up from operating income of $1.1 million for the same period a year earlier. Valvolines sales and operating revenues for the quarter also increased 13 percent over the same period a year earlier, to $351 million.
During the quarter, Valvoline achieved a significant rebound in earnings, benefiting from stabilizing base oil costs and the effects of previously announced price increases, along with reductions in selling, general and administrative costs, said James OBrien, chairman and chief executive officer for Covington, Ky.-based Ashland. Valvoline should continue to benefit from improved pricing relative to base oil costs and stabilized sales volume.
SKs lubricants division reported a 126 percent increase in operating profit for the three months ended Dec. 31 to 61 billion South Korean won (U.S. $65 million), up from 27 billion won (U.S. $28.8 million) during the same period in 2005. Sales for the lubricants division also increased by 31 percent to 268 billion won (U.S. $286.3 million), up from 205 billion won (U.S. $218.6 million) during the same period in 2005.
For the full year,SK’s lubricants division recorded the highest growth in the company compared to 2005, with sales rising 32 percent to 897 billion won (U.S. $958.1 million) and operating profits jumping 76 percent to 179 billion won (U.S. $191.3 million).
SK, of Ulsan, South Korea, attributed its results to a variety of factors, including increased demand for high quality lubricant base oils, a production increase following base oil facility repairs in May 2006, and efforts to improve fuel efficiency. The company said efforts to improve operating efficiency also contributed to growth in the lubricants division as did increased export of lubricant base oil products through diversified marketing in international markets.