Financial results for the quarter ending Sept. 30 showed increased sales but decreased operating income at lubricant blender Valvoline, and growth in operating profit for South Korean base oil refiner SK Energys lubricant division, compared to the year-ago quarter. SK also recorded a rise in lubricants revenue for the quarter, in comparison with year-earlier results.
Valvoline parent company Ashland said the business reported operating income of $13.1 million for the three months ending Sept. 30 (the fourth quarter of Ashlands fiscal year), down 27 percent from $17.9 million for the same period a year earlier. Valvolines sales and operating revenues for the quarter reached $454 million, up 18 percent from a year earlier, which the company attributed mainly to price increases.
James OBrien, Ashland chairman and CEO, noted that Valvolines operating income declined for the quarter, as we received significant base oil and additive cost increases in the early to mid summer, creating margin compression through much of the quarter. Price increases implemented in August and September fully mitigated the impact of raw material increases for only the latter portion of the quarter.
For its fiscal year ending Sept. 30, Valvoline had operating income of $83 million, down $3 million from its 2007 results. Sales and operating revenue for 2008 grew 9 percent to $1.7 billion, from $1.5 billion in 2007. OBrien noted that Valvoline completed its second-best fiscal year ever for operating income, slightly below 2007s record.
Covington, Ky.-based Ashland as a whole reported net income of $28 million on revenues of $2.2 billion in the quarter. For the year, Ashland totaled $213 million in net income on $8.4 billion in revenues.
Seoul-based SK Energys lubricants division reported a 68 percent increase in operating profit for the three months ending Sept. 30, to 67.6 billion won (U.S. $47.1 million), up from 40.3 billion won ($28.1 million) during the year-earlier period.
Revenue for SKs lubricants segment grew by 118 percent to 589.1 billion won ($412.7 million) in the third quarter, up from 269.9 billion won ($189.1 million) a year earlier.
SK attributed the increases in revenue and operating profits to a rise in product prices and increased sales volume. The company also said export volume increased from its Dumai, Indonesia, joint venture base oil plant, which can produce 7,650 barrels per day of API Group III base oil. At its Ulsan, South Korea, refinery, SK has capacity to produce 16,000 b/d of Group III and 5,000 b/d of Group II base oils.
As a whole, SK Energy reported third-quarter net income of 471.8 billion won ($510.3 million), on revenues totaling 14.3 trillion won (U.S. $10 billion).