Lube blender Fuchs’ Q1 profit falls

German lube blender Fuchs Petrolub saw profit slip in the first quarter of the year as costs rose faster than sales.

Net profit of €67mn ($70.5mn) in the three months to end-March fell by 6pc from the same period a year earlier.

At the same time, gross profit of €262mn rose by 3pc from year-earlier levels to the highest in at least seven years.

Gross profit got a boost from a 16pc rise in sales to €808mn in the first three months of the year. Revenue rose mostly because of higher sales prices for the blenders’ products.

But costs rose at an even faster pace, by 24pc to €546mn. The last time that sales rose faster than costs was in the first quarter of 2021.

Sales got a boost early last year from strong growth in China.

That support was much weaker during the first quarter of this year as lockdown measures in China slashed economic activity and demand for lubricants.

The rise in costs partly reflected higher prices for raw materials. Base oil prices rose sharply in the first quarter of the year, especially in Europe, amid signs of growing supply tightness.

The rise in costs also extended to other key expenses including personnel and freight.

The higher costs squeezed Fuchs’ gross profit margin to 32.4pc in the first quarter, down from 36.6pc during the same period last year. But it edged up from 31pc during the final three months of 2021.