NewMarket Corporation Chairman and Chief Executive Officer, Thomas E. Gottwald, released the following earnings report of the Companys operations for the second quarter and first half of 2016.
Sales for NewMarket Corporation's petroleum additives segment, Afton Chemical, for the second quarter of 2016 were $516.1 million, down 7.4% versus the same period last year, due mainly to changes in selling prices, mix and lower shipments.
Operating profit for the second quarter of 2016 was $102.5 million, a 9.0% increase over second quarter operating profit last year of $94.1 million. The increase was primarily due to lower raw material and conversion costs, partially offset by decreases in selling prices and shipments. Shipments between the quarterly periods were down 1.5% from the same period last year, as the decrease in lubricant additive shipments was only partially offset by an increase in fuel additives shipments. North America and Latin America were the main regions contributing to lower lubricant additives shipments, and North America and Asia Pacific were the primary drivers for the increase in fuel additives shipments.
Sales for the first half of the year were $1,022 million compared to sales in the first half of last year of $1,112 million, or a decrease of 8.1%. This decrease was due mainly to changes in selling prices, mix and lower shipments.
Operating profit for the first half of the year was $202.9 million compared to $199.1 million for the first half of 2015, or an increase of 1.9%. The increase was primarily due to lower raw material and conversion costs, partially offset by decreases in selling prices and shipments. Shipments decreased 2.4% between periods, as the decrease in lubricant additives shipments was partially offset by an increase in fuel additives shipments. North America and Latin America were the main regions contributing to lower lubricant additives shipments, and North America and Asia Pacific were the primary drivers for the increase in fuel additives shipments, although those increases were partially offset by a decline in our European region.
"We continued to generate solid operating cash flows in the first half of 2016. During this period, we paid dividends of $37.9 million, funded capital expenditures of $64.3 million which included the continued investment in our new manufacturing facility in Singapore" said NewMarket Corporation Chairman and Chief Executive Officer, Thomas E. Gottwald.
"Our petroleum additives segment continued its solid performance in the second quarter and first half of 2016. Our operating margins remain strong and consistent with our long-term expectations for the performance of our business. We are committed to providing our customers with products and innovative solutions to meet their ever-changing business needs, evidenced by our ongoing robust investments in research and development. In addition, we have completed construction of phase one of our new manufacturing facility in Singapore. Phase two is expected to be completed in 2018 and will more than double our investment there. We believe the fundamentals of how we run our business - a long term view, safety-first culture, customer-focused solutions, technology-driven product offerings, and world class supply chain capability - will continue to be beneficial for all our stakeholders" Gottwald said .
NewMarket Corp's net income for the second quarter of 2016 was $64.4 million compared to net income of $58.7 million for the second quarter of 2015. For the first half of 2016, net income was $126.3 million compared to net income of $122.7 million for the first half of last year.
