The third quarter brought improved performance for Castrol India and SK Lubricants. Castrols net profit for the three months ended Sept. 30 rose 11 percent compared to the same period of 2013, while SK reported a 16 percent uptick in operating profit.
Castrol Indias operating income, including sales revenue and interest earned, jumped 11 percent to Rs 8 million (U.S. $130,375), up from Rs 7.2 million in the previous years corresponding quarter.
Castrol, operating from Mumbai, also reported an increase in expenditures, having spent Rs 6.2 million this quarter compared to Rs 5.7 million in the same quarter last year.
The company reported around Rs 1.2 million in net profit, an 11 percent gain from 2013s third quarter figure of approximately Rs. 1.0 million.
The profit for the third quarter was higher largely due to higher volume and improved unit gross profit as compared to the same period last year, Managing Director Ravi Kirpalani said. This is a strong performance driven by the continued momentum in the personal mobility segment where we have been showing good growth over the last several quarters, driven primarily by our key brands – Castrol Activ in the two-wheeler segment and Castrol Magnatec in the passenger car segment.
Castrol India launched its Castrol CRB Mini Truck commercial vehicle engine oil in this quarter, which it said made a strong offtake in the market. The company also collaborated with Maruti Suzuki India Ltd. to open a liquid engineering center in Gurgaon, India and form a new diesel engine lubricant.
Despite sluggish growth in manufacturing and industrial production in the country during the first three quarters of the year, Castrols industrial business has shown both volume and gross margin growth compared to the same period last year, Kirpalani said.
Kirpalani expressed confidence that the global softening of crude oil prices would help lower base oil costs. However, the commercial vehicle business continues to remain challenging for Castrol, he added, noting that the company will continue focusing on the personal mobility business.
SK Lubricants
SK Lubricants posted an operating profit of 73.2 billion South Korean won (U.S. $69.8 million) for the third quarter, up 16.8 percent from 62.8 billion won a year earlier.
Third quarter sales declined to 700.9 billion won from 740.4 billion won, a 5.3 percent decrease.
In its third quarter earnings presentation, SK Innovation said it expects competition in the API Group II base oil market to continue intensifying, due to new capacity additions.
SK is the worlds largest Group III supplier, with wholly owned and JV plants in Korea, Indonesia and Spain that total a Group II/Group III capacity of 63,000 barrels per day.