Sales for the Afton Chemical (NewMarket Corp petroleum additives segment) for the first quarter of 2018 were $586.908 million, up 8.7% versus the same period last year. Petroleum additives operating profit for the first quarter of 2018 was $84.1 million, an 11.8% decrease over first quarter operating profit last year of $95.4 million. The decrease was due mainly to higher raw material and conversion costs, partially offset by changes in selling prices, and product and regional mix. The company said that during the quarter, the segment continued to see raw material prices increase as they have over the past several quarters.
NewMarket Corporation Chairman and Chief Executive Officer, Thomas E. Gottwald said "While we have made progress toward adjusting our selling prices to offset the effects of those higher costs, we have been unable to adjust often and fast enough to compensate for the pace of cost increases we have seen".
Petroleum additives saw record shipments in the first quarter of 2018, with a slight improvement over the same period last year, which was its prior record for quarterly shipments. The increase was primarily due to increases in lubricant additives shipments partially offset by decreases in fuel additives shipments. Latin America and Asia Pacific were the main regions contributing to higher lubricant additives shipments. Europe and Asia Pacific were the primary drivers for the decrease in fuel additives shipments, partially offset by an increase in Latin America, the company said.
"Throughout the rest of 2018, we expect to see solid sales and shipments in our petroleum additives business. Margin improvement will remain our top priority throughout the rest of this year, as we are committed to reversing the effects of the margin compression we have seen over the past several quarters, primarily due to rising raw material costs. This will remain a priority until we begin to see raw material prices stabilize." Gottwald said.
Parent NewMarket Corp's net income for the first quarter of 2018 was $60.6 million, a decrease of 5.3% compared to net income of $63.9 million for the first quarter of 2017. Sales for the first quarter were $589.245 million compared to $542.818 million in the first quarter of 2017.