Fuchs Second-Quarter Profit Tops Estimates on Demand From China
Fuchs Petrolub SE, the world’s largest independent lubricant maker, posted second-quarter profit that beat analyst estimates as demand from Asia-Pacific and Africa rose.
Earnings before interest and taxes gained 10 percent to 80.4 million euros ($106.2 million), the Mannheim, Germany-based company said today in a statement. Analysts surveyed by Bloomberg had predicted 78.1 million euros.
Fuchs said today it is sticking to a full-year target to increase earnings and sales, with new factories in Russia and northern China on schedule to start operations in the second half. The remainder of the year will probably be similar to the first, although exchange rates will have to be monitored, the company said today.
“Our companies in China and South Africa enjoyed particularly strong growth,” Fuchs said today. “However, the South African rand, the Australian dollar and the Japanese yen all suffered significant losses relative to the euro.”
Sales rose 1.5 percent to 468.3 million euros and net income was 55.8 million euros, both in line with an average analyst estimate.
Chief Executive Officer Stefan Fuchs has said he is seeking acquisitions to boost this year’s revenue increase beyond the “low single-digit percentage range” that is forecast for organic growth.
Tighter emission regulations and fuel efficiency mean that demand will increase for higher-grade lubricants, John Philipp Klein, an analyst at Berenberg Bank, said in a note to clients before the earnings release. Those require Fuchs to use a higher quality of base oil as a raw material, pushing up fixed costs at the company, he said.
The lubricant maker, majority owned by the the Fuchs family, has a market value of 3.8 billion euros.
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