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Monday, March 12, 2018VOLUME 14 ISSUE 11
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Calumet Posts Improved 4Q and FY 2017 Earnings; FUCHS PETROLUB Posts Record FY 2017 Revenues


Calumet Specialty Products reported a $64.9 million net loss for the fourth quarter 2017 which included the impact of: (1) a $172.2 million net gain on sale from the divestitures of both the Superior, Wisconsin refinery and Anchor Drilling Fluids USA, LLC; and (2) $205.7 million non-cash impairment charges primarily related to the revaluation of the Partnership's property, plant and equipment at several facilities. Without these adjustments Net loss for the fourth quarter 2017 would have been $31.4 million.

The Partnership's $60.1 million Adjusted EBITDA for the fourth quarter 2017 included: (1) an $8.7 million favorable net impact related to lower of cost or market ("LCM") inventory adjustments and last-in, first-out ("LIFO") inventory layers; and (2) a $12.7 million net expense related to enterprise resource planning ("ERP") system expenses and realized hedging losses.  Without these impacts, Adjusted EBITDA for the fourth quarter 2017 would have been $64.1 million.

During the fourth quarter 2017, total specialty products segment (lubricants, solvents, waxes and packaged and synthetic specialty products) gross profit increased 19.1% compared to the year-ago period, driven by healthier market conditions, offset somewhat by rising crude feedstock costs. Adjusted EBITDA for the fourth quarter 2017 was $38.6 million, which was a 37.9% improvement compared to the year-ago period. Specialty products segment gross profit per barrel in the period was $33.07, which grew 30.7% compared to last year's comparable quarter despite a nearly nine dollars per barrel increase in the cost of West Texas Intermediate ("WTI") during the fourth quarter. The segment's Adjusted EBITDA Margin for the fourth quarter was 12.3% versus 9.2% for the prior year comparable period. The segment also benefited from a $2.5 million favorable LCM inventory adjustment, which was partially offset by a $3.0 million LIFO inventory liquidation loss.

During fiscal year 2017, total specialty products sales volumes decreased 3.8% year-over-year, driven primarily by supply-chain disruptions that took place in the third quarter. However, annual segment Adjusted EBITDA increased due to stronger market conditions, record volume and profit performance in the higher-margin branded products division, and record production at the Cotton Valley refinery, which produces specialty solvents. These were partially offset by consistently rising feedstock costs throughout the fiscal year as WTI ended fiscal 2017 up 12.5%. Specialty products segment gross profit per barrel during fiscal year 2017 of $34.61 was up slightly compared to 2016 gross profit per barrel of $34.57, despite the increase in the price of crude. On an annual basis, the specialty products segment's Adjusted EBITDA Margin remained steady at approximately 15.0%. Specialty products segment performance for 2017 was also impacted by a $10.9 million favorable LCM inventory adjustment and a $3.9 million LIFO inventory liquidation loss. 

Lubricating oils production volume for the fourth quarter 2017 fell to 13,155 barrels per day from 15,373 bpd produced in the fourth quarter in 2016. For the full year 2017, lubricating oils production volume remained at nearly the same level at 14,606 bpd compared to 14,697 bpd in 2016. 

Packaged and synthetic specialty products, which represents production of branded and packaged specialty products, including the products from the Royal Purple, Bel-Ray and Calumet Packaging facilities, production volume for the fourth quarter 2017 fell to 1720 barrels per day from 1816 bpd produced in the fourth quarter in 2016. For the full year 2017, packaged and synthetic specialty products production volume increased to 2206 bpd compared to 1777 bpd in 2016. 


FUCHS PETROLUB reported that in the 2017 financial year, group sales revenues increased by 9% or EUR 206 (US$253.7) million to a new record of EUR 2.5 billion, which the company said was completely underpinned by organic growth. Company acquisitions, which contributed 1% to the growth in sales revenues, were offset by negative currency translation effects in the same amount.

At EUR 373 million compared to EUR 371 million, group earnings before interest and tax (EBIT) were at the previous year's level. Delays in passing on increases in raw material prices and regional changes in the product and customer mix meant that the growth in sales revenues was reflected in EBIT only to a limited extent. Earnings after tax increased to EUR 269 million compared to EUR 260 million, largely as a result of the US tax reform.

FUCHS PETROLUB generated substantial growth in all regions of the world in 2017. Almost all companies in Europe recorded growth, with regional sales revenues increasing by 7% to EUR 1,515 million compared to EUR 1,417 million. EBIT declined year-on-year to EUR 187 million compared to EUR 196 million due to goodwill impairment and margin and mix factors.

The Asia-Pacific, Africa region has continued to develop significally in the year. The major companies in China, Australia and South Africa recorded double-digit growth rates in particular due to the increase in sales volumes. Sales revenues in the region rose by 18% or EUR 113 million to EUR 733 million compared to EUR 620 million. EBIT increased to EUR 134 million compared to EUR 127 million. This figure was primarily attributable to China, as well as South Africa and Australia.

In 2017, sales revenues in the North and South America region rose by 13% to EUR 393 million compared to EUR 349 million. The region recorded organic growth of 10%, while external growth due to the acquisitions made in 2016 contributed 5% to the increase in sales revenues. The slightly weaker US dollar meant a moderate reduction in sales revenues reported in euro. EBIT in the region increased to EUR 65 million compared to EUR 62 million.

The figures published are preliminary figures. FUCHS PETROLUB will publish the complete figures for the 2017 financial year and the outlook for 2018 on March 21, 2018.

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