Safety-Kleen Sustainability Solutions (SKSS), the US’ largest base oils re-refiner, expects higher prices and sales volumes to boost fourth-quarter earnings after profit extended its slide in the third quarter. The refiner’s profit before interest, taxes, depreciation and amortization (EBITDA) came to $31.1mn in the three months to end-September, down 70pc from year-earlier levels.Sales of $219mn in the third quarter fell by 21pc from year-earlier levels to the lowest in almost three years.SKSS is a unit of Clean Harbors.Sales fell because of lower base oils prices and a drop in sales volume.Sales volume fell partly because of unexpected disruptions to production at several of SKSS’ refineries, and the delayed start-up of one of them.A rise in base oils prices at the end of the third quarter and the resumption of normal production at all its plants raised the prospect of higher revenue and sales volumes in the fourth quarter of the year.The refiner’s feedstock costs in the fourth quarter were also set to be lower than during the third quarter.SKSS plans to tap the higher price of Group III base oils over Group II base oils to boost its future profitability.It carried out in the third quarter a pilot project to make Group III base oils at one of its plants.It plans to scale up the project in 2024 to produce a few million gallons of Group III base oils, Clean Harbors Co-Chief Executive Officer Mike Battles said in an earnings call.It plans to expand the move to other plants in subsequent years.It is targeting output of around 25mn USG of Group III base oils.It is likely to use internally most of the Group III base oils that it produces in 2024 and to sell more to third parties later in the year as it boosts output of the product..Safety-Kleen’s Q2 profit falls
