Profit margin stays well above two-year average
Margin gets support from higher lube sales share, Group III output
Clean Harbors to build unit to convert byproduct into N600
Safety-Kleen Sustainability Solutions (SKSS), the largest base oils re-refiner in the US, maintained robust profit margins in the third quarter of the year even as domestic base oils prices softened.
SKSS’ EBITDA margin came to 18.8% in the three months to end-September.
Margins held well above the sub-17% average levels of the past two years even as they edged down from 19.4% during the second quarter.
Profit margin held firm even as domestic US base oils prices edged lower during the third quarter of the year in the face of weaker supply-demand fundamentals.
SKSS offset the price-weakness by lowering its waste-oil collection costs and improving its product-mix, Clean Harbors said in a statement.
SKSS is a unit of Clean Harbors.
The improvements included increasing its sales of higher-value direct lubricants as a share of total volume and expanding output of its Group III base oils.
Those supplies benefited from a rising price-premium to Group II base oils.
Clean Harbors also announced a major upgrade to capture more value from its re-refinery byproducts.
A new unit will convert vacuum tower asphalt extender (VTAE) byproduct into Group II N600 base oils, with commercial launch targeted for 2028.
It currently sells VTAE into the roofing and paving markets.