Fuchs Petrolub and Ashlands Valvoline business each posted increases in first quarter profits and sales compared to year-earlier numbers. Heritage-Crystal Clean reported an increase in sales and a first quarter operating loss. Chemturas petroleum additives segments first quarter net sales were up from a year earlier.
Fuchs Petrolub Group posted net income of 52.8 million (U.S. $73.3 million) for the first quarter, up 2.3 percent from 51.6 million in the year-earlier quarter.
The Mannheim, Germany-based independent lubricant blenders sales revenue reached 456.8 million for the first quarter, up 3.3 percent from 442 million in 2013s first quarter. Fuchs revenue in the first quarter grew 7.2 percent to 284.5 million in Europe, compared to a year earlier, with Germany, Central and Eastern Europe recording high growth rates. Fuchs revenue increased 1.4 percent to 119.4 million in Asia-Pacific and Africa. Its Chinese companies recorded particularly strong growth rates, with high growth rates also achieved in Singapore and Indonesia. Sales revenues declined 0.3 percent in North and South America, which the company partly attributed to weakness in South American currencies.
In its earnings release, Fuchs noted the International Monetary Fund concluded the global economy is displaying increasing signs of recovery. Following a 3 percent increase last year, the global economy is set to grow by around 3.6 percent this year, according to the IMF. For Germany, the IMF raised its estimate for economic growth to 1.7 percent for 2014. On the basis of the positive economic framework conditions, we expect a slight increase in volumes in the German lubricant market in 2014, Fuchs said. In terms of worldwide lubricant demand, the company is proceeding on the assumption that volumes will increase by around 1 percent, compared to 2013.
Following completion of the construction work on new facilities in China and Russia, as well as expansion of the facility in Chicago last year, we will be investing in the construction of a new facility in Brazil, a new grease plant in the U.S. and a new test bench building in Mannheim in 2014, company chairman Stefan Fuchs said in his letter to shareholders.
Ashlands Consumer Markets (Valvoline) business reported operating income of $81 million for the quarter ending March 31, up 2.5 percent from $79 million in the year-earlier period, while sales hit $503 million, up 1.8 percent from the previous year.
Parent company Ashland of Covington, Ky., said lubricant sales volume reached 39.6 million gallons for the quarter, up 1 percent from 39.2 million gallons in the year-earlier quarter. The quarter ending March 31 is the second quarter of Ashlands fiscal year.
Valvoline reported a record second quarter in operating income, with good growth in lubricant volumes and sales, as well as improved product mix, Ashland Chairman and CEO James OBrien said in a news release.
The company noted that the do-it-yourself channel reported continued improvement in product mix, with premium branded lubricant sales increasing 8 percent compared to the year-ago quarter. Same-store sales at company-owned Valvoline Instant Oil Change grew 5 percent compared to the year-earlier quarter, Ashland said, driven by increased oil changes per day, average ticket price and total number of oil changes.
Heritage-Crystal Cleans oil business, which includes oil collection and refining, posted $27.1 million in sales for the quarter ending March 22, up from $25.2 million in the year-earlier quarter.
As a whole, the company posted a $1.6 million net loss in its first quarter, on $66 million in sales. That compares to a $420,000 loss on $60 million in sales in 2013s first quarter. The company doesnt break out net income for its oil business segment.
The first quarter of 2014 was challenging for our company, said Joe Chalhoub, Heritage-Crystal Cleans founder, president and CEO, in its earnings news release. In our oil business segment, extreme weather impeded our ability to collect used oil and operate our rerefinery in an efficient manner. We ran our rerefinery at 85 percent of its current 60 million gallon annual name plate capacity during the first quarter.
He added that in the companys environmental services segment, extreme weather was also a headwind, which limited our same-branch growth and created inefficiencies in many of our branches. We also experience below average solvent yields in our parts cleaning business during the first quarter, which negatively impacted our margin in this segment.
Chalhoub expressed optimism that with the extreme winter weather behind us, we expect our results in both business segments will improve in the second quarter compared to the first quarter.
Heritage Crystal-Clean Chief Financial Officer Mark DeVita noted that in the oil business segment, the market price for the type of API Group II base oil Heritage sells – produced by its 2,000 barrels per day capacity rerefinery in Indianapolis – declined from fiscal 2013s fourth quarter to fiscal 2014s first quarter. This negatively impacted our revenue and operating margin in this segment, DeVita said.
Philadelphia-based Chemturas petroleum additives segment reported $171 million in net sales for the first quarter, up 1.2 percent from $169 million in the year earlier quarter.
Sales volume increased primarily due to improved customer demand for our urethane products and more favorable sales mixed for our petroleum additives products, the company stated in its earnings news release.
Chemturas Industrial Performance Products net sales increased 2.5 percent to $247 million, up from $241 million in 2013s first quarter. The segments first quarter operating income declined 6.9 percent to $27 million in the first quarter of 2014.