Safety-Kleen Sustainability Solutions (SKSS) , the US’ largest base oils re-refiner, saw fourth-quarter profit rise, supported by higher used-oil collection charges, stronger lubricants sales and expanding Group III production.

The unit of Clean Harbors saw earnings before interest, taxes, depreciation, and amortization rise to $29.95 million in the three months to end-December.

Profit rose by 22% year on year, marking the first increase in five quarters even as revenue fell for a third straight quarter.

Key Highlights

·         Revenue faced pressure from lower base oils sales volumes and seasonal weakness in  US base oils prices.

·         US domestic Group II light-grade prices fell by 5% in the fourth quarter from the previous three months.

·         SKSS collected 56 million gallons of used oil, down from 63 million gallons during the same period a year earlier.

·         The refiner raised the fees it charged to collect used oil by almost 50% from third-quarter levels, helping to offset lower base oils prices.

·         Group III base oils production continued to rise as a share of total output, allowing the refiner lock in improved margins despite broader market weakness.

·         US Group III 4cSt prices averaged more than $180/tonne above Group II light grades during the fourth quarter, reflecting that dynamic.

·         EBITDA margin rose to 15.1% in the fourth quarter, down from 18.8% in the third quarter but well up from year-earlier levels of 12%.

Market Outlook

SKSS plans to further expand its direct lubricants sales and Group III production in 2026, helping to offset any further base oils price weakness, especially in the first quarter of the year.