Fuchs Second-Quarter Profit Tops Estimates on China SalesSheenagh Matthews
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. Analysts surveyed had predicted 78.1 million euros. The preferred shares rose the most in more than five months in Frankfurt trading.
Fuchs reiterated a full-year target of increasing earnings and sales, with new factories in Russia and northern China on schedule to start operations in the second half. The remainder of 2013 will probably be similar to the first half, although exchange rates will have to be monitored, Fuchs said today.
“Our companies in China and South Africa enjoyed particularly strong growth,” the company said in a statement. “However, the South African rand, the Australian dollar and the Japanese yen all suffered significant losses relative to the euro.”
Fuchs jumped as much as 4.8 percent to 59.57 euros in the biggest intraday gain since Feb. 22, and was trading up 3.9 percent at 10:53 a.m. The stock has risen 5.1 percent this year, valuing the company at 3.95 billion euros.
Sales rose 1.5 percent to 468.3 million euros and net income jumped 11 percent to 55.8 million euros, both in line with the average of analyst estimates compiled by Bloomberg.
Chief Executive Officer Stefan Fuchs has said he’s seeking acquisitions to boost this year’s revenue increase beyond the “low single-digit percentage range” that the company is forecasting 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 report to clients before the earnings release. Those conditions will 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 is majority owned by the Fuchs founding family.