US re-refiner and lube blender Safety-Kleen Sustainability Solutions (SKSS) saw its profit surge in the first three months of the year on the back of strong demand and substantial price increases.
Profit before interest, taxes, depreciation, and amortization (EBITDA) of $51.88mn in the first quarter rose by 64pc from the same period a year earlier, Clean Harbors said in an earnings statement.
SKSS is the re-refining and lube unit of Clean Harbors.
Demand for our base oil and blended products was consistently strong in the quarter. Global supply disruptions led to favorable market dynamics in the U.S. and substantial price increases late in the quarter."Alan McKim, Clean Harbors chairman, president, and chief executive officer
Global base oil prices surged from second-half February in response to a combination of rising crude and diesel prices, and a slowdown in the flow of base oils from Russia to outlets like Europe and Africa.
US producers were less able to respond to the stronger demand from overseas markets partly because of lower-than-usual base oils output during the first two months of the year.
The strong demand triggered a 44pc rise in SKSS's sales to $221.6mn in the first three months of the year.
With EBITDA rising faster than sales, the unit’s profit margin climbed to 23.4pc in the first quarter. The margin was up from 20.6pc during the same period a year earlier. But it fell from 29.2pc during the fourth quarter of last year.