November 7, 2018
Volume 1 Issue 46
Q3: Valvoline, Clean Harbors, Quaker, HollyFrontier
Valvoline reported increased operating income, Clean Harbors’ Safety-Kleen segment posted higher revenues, HollyFrontier’s lubricants and special products segment reported lower income from operations and Quaker Chemical’s net income increased, for the quarter ending Sept. 30.
Valvoline’s three operating segments – Core North America, quick lubes and international – reported combined operating income of $105 million for the period, a 5.7 percent rise from $99 million last year. The quarter ending Sept. 30 is the fourth quarter in the Lexington, Kentucky-based company’s fiscal year.
The three segments combined for $594 million in sales, an increase of 7.9 percent. The North American segment’s $262 million in sales accounted for approximately 44.1 percent, quick lubes contributed 30.4 percent with $181 million and international added the remaining 25.4 percent with $151 million.
North American lubricant sales hit 24.9 million gallons, the same amount as the fourth quarter of 2017 due to soft do-it-yourself sales and unfavorable product mix, offset by reduced operating expenses, according to the company’s earnings release.
Quick lubes sold 6.6 million gallons of lubricants, up 7.5 percent, mostly due to the addition of 115 new stores through acquisitions and construction of company-owned stores.
International lubricant sales – excluding unconsolidated joint ventures – reached 15.1 million gallons, a 3.3 percent increase.
Valvoline acquired Great Canadian Oil Change in the fourth quarter. The company also closed its acquisition of Oil Changers, which will be rebranded as Great Canadian Oil Change, on Oct. 31. Product sales from Great Canadian Oil Change are now reported under Valvoline’s quick lube segment.
“Quick lubes continued its strong performance in the fourth quarter, and I’m very pleased with the results generated by this important long-term growth engine, particularly in our team’s ability to drive in-store execution while accelerating new store growth,” Valvoline CEO Sam Mitchell said in the company’s earnings news release. “We had solid growth in international, while the highly competitive environment for Core North America remains challenging, which negatively impacted overall results.”
Norwell, Massachusetts-based Clean Harbors’ Safety-Kleen segment – which includes oil rerefining – reported $333.9 million in third party revenues for the third quarter, a 5.6 percent jump from $315 million in the year-earlier period. Third-party revenues include the sales of base oil, blended products, reclaimed fuel oil and a small amount of other products.
“The favorable pricing environment for Safety-Kleen, particularly within our base oil and blended products business, continued in the quarter,” said Alan McKim, chairman, president and CEO of Clean Harbors, in the company’s earnings news release. “With Safety-Kleen, we again achieved a double-digit percentage increase in profitability.”
The segment topped more than 60 million gallons of waste oil collected in the third quarter. “Our percentage of blended products was lower-than-expected at 25 percent of total gallons sold; however, our direct lubricant sales accounted for 6 percent of our total volumes, up from a year ago,” said McKim. “We remain optimistic about our ability to continue to effectively manage the spread in our Safety-Kleen rerefinery business,” he continued. “In addition, we believe that the value proposition for our direct lubricant sales remains compelling.”
Dallas, Texas-based HollyFrontier Corp.’s lubricants and specialty products segment posted a 47.3 percent slide in income from operations to $31.2 million in the third quarter ended Sept. 30, down from $46 million in the year-earlier period. Revenues from external customers reached $474.2 million, up 12.9 percent from $413 million in 2017’s third quarter.
The lubricants and specialty products segment includes Petro-Canada Lubricants and its Mississauga, Ontario, refinery, which makes products such as base oils, white oils, specialty products and finished lubricants, along with specialty lubricant from HollyFrontier’s Tulsa refineries. The recently acquired Red Giant Oil Co. is now also part of the company’s lubricants and specialty products segment.
“In our lubricants business, strong macroeconomic conditions continue to support demand and pricing for finished products,” the company stated in its earnings release.
Conshohocken, Pennsylvania-based Quaker Chemical reported net sales of $222 million in its third quarter, a 4.3 percent jump compared to 2017. The company attributed increases in volume, selling price and product mix for the increase in its earnings release.
Net income for the fluids and chemicals producer reached $19.8 million, up 69 percent from $11.7 million.