Calumet Specialty Products Partners, L.P. reported a net loss for the first quarter ended March 31, 2014 of $49.8 million compared to net income of $46.0 million in the first quarter 2013. Excluding the impact of $89.6 million in non-recurring debt extinguishment costs, Adjusted Net Income in the first quarter 2014 was $39.8 million. First quarter 2014 results include $24.6 million in non-cash unrealized derivative gains, compared to $24.5 million in the prior year period.
Calumet generated Adjusted EBITDA of $82.7 million during the first quarter 2014 versus $53.2 million during the fourth quarter 2013 and $80.0 million in the prior-year period.
Within the Specialty Products segment, gross profit increased nearly 16% during the first quarter 2014 versus the prior year period as increased sales of Calumet's packaged and synthetic products, a category inclusive of the Royal Purple®, Bel-Ray®, Quantum® and TruFuel® premium brands, contributed to an improved product mix.
"Broad-based contributions from our Specialty Products segment resulted in record first quarter Adjusted EBITDA," stated Bill Grube, Vice Chairman and Chief Executive Officer.
"During the first quarter 2014, we grew sales volumes and realized improved pricing on our packaged and synthetic products, when compared to the year-ago period," continued Grube. "Sales volumes of Royal Purple, Bel-Ray and TruFuel products all increased on a year-over-year basis during the first quarter. Early indications are that our introduction of Royal Purple products to the Wal-Mart store network has been very successful, with sales tracking ahead of our forecasts. Once the rollout is completed, at least 2,400 Wal-Mart Stores will be carrying our Royal Purple products, with select products planned for sale in more than 3,000 locations."
Calumet continues to make progress on a project that is expected to double esters production capacity at its Missouri esters plant from 35 to 75 million pounds per year. Esters are a key base stock used in the aviation, refrigeration and automotive lubricants markets. The Partnership anticipates completion of the project during the second quarter 2015. The estimated total cost of the expansion project is approximately $40 million. The Partnership estimates that the annualized incremental Adjusted EBITDA resulting from this project will be approximately $10 million.
Separately, Mannheim, Germany-based Fuchs Petrolub AG reported first-quarter profit after tax rose 2.3 percent to 52.8 million euros (US$73.3 million) from 51.6 million euros. The group increased its sales revenues 3.3 percent to 456.8 million euros from 442 million euros, with all regions recording organic growth.
Revenue in the first quarter grew 7.2 percent to 284.5 million euros in Europe, compared to a year earlier. Revenue increased 1.4 percent to 119.4 million euros in Asia-Pacific and Africa. The companys Chinese operations recorded strong growth rates, as well as in Singapore and Indonesia. Sales revenues declined 0.3 percent in North and South America, which the company partly attributed to weakness in South American currencies.
Looking ahead, the company expects to record further organic growth in sales revenues in all global regions over the next three quarters. However, it does not expect being able to maintain the growth rate of 7.3 percent recorded in the first quarter.
Following completion of the construction work on new facilities in China and Russia, as well as expansion of the facility in Chicago last year, we will be investing in the construction of a new facility in Brazil, a new grease plant in the U.S. and a new test bench building in Mannheim in 2014, company chairman Stefan Fuchs said in his letter to shareholders.
