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August 9, 2017

Volume 17 Issue 52

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Q2 Earnings Wrap-up

Calumet Specialty Products Partners LP's net income rebounded, Afton Chemical’s operating profit slipped, Clean Harbors’ Safety-Kleen segment reported higher third-party revenues, and BP’s lubricants business posted lower profits, all for the second quarter, compared to a year earlier.

Calumet

Calumet Specialty Products Partners LP posted a $9.6 million net income for the quarter ending June 30, rebounding from a $147.9 million net loss a year earlier.

Indianapolis-based Calumet’s sales reached more than $1 billion for the second quarter, up 2.8 percent from $972.9 million.

First-quarter sales volumes for specialty products totaled 29,418 barrels per day, compared to 29,029 in the year-earlier quarter. Lubricating oils reached 15,914 b/d, compared to 15,716. Packaged and synthetic specialty products amounted to 2,648 b/d, up from 2,110. The segment includes production at the Royal Purple, Bel-Ray, Calumet Packaging and Missouri facilities. Other second-quarter sales volumes included 1,373 b/d for waxes and 8,239 b/d for solvents.

“We are particularly encouraged by the growth in our specialty products and oilfield services segments, as well as the continued contribution from our self-help initiatives. Our improvements in the second quarter will act as a stepping stone upon which we will continue to create value for our customers and unitholders as we transition into the second half of 2017,” said Calumet CEO Timothy Go. In the company’s quarterly earnings call, Go said the company’s branded and packaged business was another significant contributor to Calumet’s improved performance.

During Calumet’s earnings call with analysts, he provided an update on Calumet’s new API Group III base oil production in Shreveport, Louisiana, which the company announced in May. “There are a lot of certifications that are required in order to get into the formulations and blendings of these products,” Go said during the call with analysts. “We have one additive maker that had certified us through, all the way through 5W-30 blends last quarter, and we expect the final approval into the 0W blends here this month. We have another additive company that certified us the same way into the 5W blends here in the second quarter, and we expect to continue to make progress with them, to get the final certifications.”

Go noted that in the meantime, the company’s customers are getting its Group III base oil samples, “testing them in their formulations and getting to the point where they can understand how they can use this in their specific blending formulations, and we feel confident that, in the third quarter, we're going to be able to get that going in a meaningful way.”

Afton Chemical

NewMarket Corp.’s Afton Chemical petroleum additives segment posted operating profit of $94.9 million, down 7.4 percent from $102.5 million in 2016’s second quarter. “The decrease was due to lower selling prices and increasing raw material costs, partially offset by increased shipments,” Richmond, Virginia-based NewMarket stated in its earnings news release.

Sales for the petroleum additives segment reached $544.2 million for the second quarter, up 5.4 percent from a year earlier. The company attributed the increase mainly to higher shipments, partially offset by changes in selling prices.

The company noted that shipments were up 6.4 percent from the same period last year, with increases in both lubricant additives and fuel additives shipments. Asia-Pacific and Europe were the main regions contributing to the increase in lubricant additives shipments.

Clean Harbors

Norwell, Massachusetts-based Clean Harbors’ Safety-Kleen segment – which includes oil rerefining – reported $303 million in third party revenues for the second quarter, up more than 9 percent from $277.7 million a year earlier. The third-party revenues include sales of base oil, blended products, reclaimed fuel oil and a small amount of other products.

“Top-line results in Safety-Kleen reflected higher base oil and lubricant pricing, contributions from 2016 acquisitions, growth in our parts washer business and the steady ramp-up of our OilPlus closed loop offering,” Clean Harbors Chairman and CEO Alan McKim said in its earnings news release. McKim added that the closed loop offering “will deliver incremental growth in 2017 as we expand into additional markets with our bulk lubricants offering.”

The company has combined its SK Environmental Services and Kleen Performance Products segments into a single reporting segment called “Safety-Kleen,” which it says reflects the increasing interpendencies between the two businesses.

BP

BP’s lubricants business reported an underlying replacement cost profit before interest and tax of $355 million for the second quarter, down 13.8 percent from $412 million for the same period in 2016.

Earlier during the second quarter, London-based BP announced an agreement to be the exclusive premium lubricants brand sold by Kroger, the largest supermarket chain in the United States, the company said in its stock exchange announcement.