NewMarket Corp. reports lower sales of petroleum additives in second quarter

NewMarket Corp. reported lower sales of petroleum additives in the second quarter of 2016 mainly due to changes in selling prices, mix and lower shipments. Although sales was down by 7.4% year-on-year to USD 516.1 million, operating profit rose 9% over a year ago period to USD 102.5 million. The increase was primarily due to lower raw material and conversion costs, partially offset by decreases in selling prices and shipments.

NewMarket Corp., based in Richmond, Va., U.S.A., through its subsidiaries Afton Chemical Corp. and Ethyl Corp., develops, manufactures, blends and delivers chemical additives that enhance the performance of petroleum products. Afton Chemical is one of the top four leading petroleum additive manufacturers in the world.

Shipments between the quarterly periods were down 1.5% from the same period last year, as the decrease in lubricant additive shipments was only partially offset by an increase in fuel additives shipments, the company said. North America and Latin America were the main regions contributing to lower lubricant additives shipments, and North America and Asia Pacific were the primary drivers for the increase in fuel additives shipments.

Petroleum additives sales for the first half of the year were USD 1,022 million compared to sales in the first half
of last year of USD 1,112 million, or a decrease of 8.1%. This decrease was also due mainly to changes in selling prices, mix and lower shipments. Petroleum additives operating profit for the first half of the year was USD 202.9 million compared to USD 199.1 million for the first half of 2015, or an increase of 1.9%. The increase was also primarily due to lower raw material and conversion costs, partially offset by decreases in selling prices and shipments. Shipments decreased 2.4% between periods, as the decrease in lubricant additives shipments was only partially offset by an increase in fuel additives shipments.

North America and Latin America were the main regions contributing to lower lubricant additives shipments, and North America and Asia Pacific were the primary drivers for the increase in fuel additives shipments, although those increases were partially offset by a decline in Europe.

“We continued to generate solid operating cash flows in the first half of 2016. During this period, we paid dividends of USD 37.9 million, funded capital expenditures of USD 64.3 million which included the continued investment in our new manufacturing facility in Singapore, and repurchased 98,867 shares of our common stock for a total of USD 35.8 million, or an average cost of USD 362.25 per share,” said Chairman and Chief Executive Officer Thomas E. Gottwald.

“Our operating margins remain strong and consistent with our long-term expectations for the performance of our business. We are committed to providing our customers with products and innovative solutions to meet their ever-changing business needs, evidenced by our ongoing robust investments in research and development,” he said.

“In addition, we have completed construction of phase one of our new manufacturing facility in Singapore. Phase two is expected to be completed in 2018 and will more than double our investment there.”