US blender Valvoline’s profit rose in the three months to end-June as higher prices and record volume sales boosted revenue.Its profit margin remained under pressure as costs rose faster than sales.Net profit of $99mn in the second quarter of the year rose by 2pc from a year earlier. Operating profit of $138mn rose by 5pc from the previous year.Profit rose on the back of a 21pc rise in sales to $957mn..Revenue from Valvoline’s retail services business rose by 16pc, and its global products business by 24pc. The global products business’ share of total sales held steady at around 60pc.Valvoline is selling its global products business to Saudi Aramco for $2.65bn..Aramco buys Valvoline's global lube business.Global products revenue got a boost from a 9pc rise in sales volume to a record high and from higher prices in response to rising base oil feedstock costs..Top-line demand and ongoing price pass-through drove strong growth in profitably both sequentially and versus last year.Valvoline Chief Executive Officer Sam Mitchell.Sales in the Americas markets posted the strongest growth. Sales rose by 59pc in Latin America and by 33pc in North America.Sales edged up in the Europe, Mideast Gulf and Africa market from year-earlier levels. Sales were flat in Asia-Pacific.The 28pc rise in costs outpaced the higher sales.Costs rose partly because of the rise in raw material costs.Base oil prices rose sharply from March through May in response to surging crude prices and an even steeper rise in diesel prices. The trend incentivized refiners to focus on producing more middle distillates rather than base oils.Strong demand added to the upward price pressure..US' April base oils/lube demand rises .Rising costs kept Valvoline’s operating profit margin under pressure at 14.4pc. The margin was up from 13.2pc in the first three months of the year, reflecting the boost from Valvoline’s higher prices. But it was down from 16.5pc during the same period last year.Valvoline adjusted its outlook for earnings before interest, taxes, depreciation, and amortisation (EBITDA) to $670-680mn for the financial year ending end-September. The projection was down from $675-700mn previously.Valvoline cited ongoing inflationary pressures for the lowered profit forecast..US blender Valvoline’s Q1 profit falls
