Mixed 2017 Earnings for Singapore Blenders

By Lam Lye Ching

United Global Ltd.’s net profit for 2017 grew with its overseas expansion, while fellow Singaporean lubricant blender AP Oil International Ltd.’s 2017 net profit was adversely affected by the slowdown in the marine lubricant sector.

United Global recorded a jump in net profit for the full year by 62.5 percent to U.S. $9.2 million, and its revenue increased 9 percent to $100 million.

“The manufacturing segment was lifted by a maiden six-month contribution from PLI (PT Pacific Lubritama Indonesia), buoyed by an increase in sales volume contributed by PLI after the acquisition of PLI in July 2017,” the company announced. 

“However, the segment’s average selling price decreased, due to lower [average prices] recorded by PLI’s different product mix. As a result, the gross profit margin dipped by 2.2 percent to 21.5 percent,” it added. PLI is an Indonesian independent lubricant manufacturer with an annual blending capacity of 80,000 metric tons.

The company said it will continue to expand its global market share. It plans to expand its lubricants manufacturing and trading business organically in Singapore and Indonesia. For other markets, PLI will look into development of partnerships and joint ventures to accelerate expansion.

The company is focusing on premium markets like Australia and the Commonwealth of Independent States. A representative office was set up in October in Sydney, Australia, to investigate opportunities there. It also registered a new Japanese brand of lubricants called Ichiro. No further details were disclosed at press time.

Meanwhile, AP Oil continued its decline in net profit – following an 11 percent decline during 2016 – compared to the previous financial year. Net profits for 2017 fell 28 percent to 2.4 million Singapore dollars (U.S. $1.8 million). However, revenue rebounded compared to the previous financial year, rising 16 percent to $92 million due to increased manufacturing and trading volumes.

“Financial year 2017 has seen major marine lubricant competition implementing a broad-based, low-price strategy. Coupled with an internationally weak shipping industry, this has eroded gross profit. We expect these conditions to continue into financial year 2018,” the company said in its statement.

The company markets automotive, industrial and marine lubricants under the AP Oil, SIN-O and Polaris brands. It has two blending plants in Singapore and a facility in Vietnam, operated by its joint venture, AP Saigon Petro. The blending plant has production capacity of 25,000 tons per year and 4,000 tons of tank storage for base oil, additives and finished products.