Lube blender Fuchs’ Q2 profit falls

German lube blender Fuchs Petrolub saw profit fall in the second quarter of the year as a plethora of costs and challenges outweighed higher sales.

Net profit of €62mn ($63.4mn) in the three months to end-June fell by 5pc from the same period a year earlier.

Earnings before interest and tax (EBIT) fell by 3pc to €87mn.

Profit fell as a 21pc rise in costs outpaced the 17pc increase in sales.

Costs rose to their highest in more than seven years amid surging raw material prices, supply-chain bottlenecks, and rising freight and personnel costs.

Base oils prices surged in the second quarter of the year in response to higher crude prices and tighter-than-expected supply in Europe.

One of those crises was lockdowns in China. The moves slashed the country’s economic activity and lube demand.

Fuchs' sales growth in Asia-Pacific slid to less than 3pc in the second quarter, reflecting that slowdown.

The growth rate was the slowest since the second quarter of 2020, when the first round of lockdowns was in place at the start of the Covid-19 pandemic.

Stronger sales growth in Europe and especially the Americas cushioned the slowdown in Asia-Pacific.

“Fuchs once again benefited from its broad geographical positioning and highly fragmented customer base,” Fuchs said.

Sales in North and South America rose by 41pc in the second quarter, and by 17pc in the Europe, Mideast Gulf and Africa market.

Firmer sales eased the pressure on Fuchs’ EBIT margin, which still slipped to 10.5pc in the second quarter.

The margin was down from 11.5pc in the first three months of the year and the lowest in two years.

Fuchs maintained its sales forecast at the upper end of a €3.0-3.3bn range for the year. It maintained its EBIT forecast at the lower end of a €360-390mn range.

The forecasts assumed no worsening of the current wave of crises affecting the market.