Valvoline achieved robust growth in operating income and sales revenue during the first quarter, while Moove incurred a substantial loss due to a legal charge. Additionally, Perimeter Solutions experienced a decline in net sales.
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Vavoline
Valvoline Reports Strong Second-Quarter Growth and Outlines Strategic Focus
Valvoline’s second-quarter operating income from continuing operations demonstrated substantial growth, reaching $61.2 million, a 53% improvement compared to the previous year. Sales from continuing operations also experienced a significant boost, increasing by 16% to $344.5 million. System-wide store sales showed impressive growth, reaching nearly $660 million, an 18% increase.
Valvoline CEO Sam Mitchell expressed satisfaction with the second-quarter results, stating that they aligned with their expectations and that the company remains on track to achieve its full-year 2023 targets.
In March, Valvoline successfully completed the sale of its Global Products business to Saudi Aramco, generating $2.38 billion in net proceeds and an after-tax gain of $1.15 billion. This transaction was initially announced in August of the previous year.
Order: recycle base oil
As a result of the sale, Valvoline began excluding Global Products from its earnings reports, focusing solely on the remaining business segment, which is its Retail Services business. This segment comprises the company’s oil change centers in the United States and Canada.
Mitchell outlined the company’s new strategic focus, which includes driving growth in system-wide store sales, expanding through both company-operated and franchised additions, and continuously evolving the service portfolio over time.
Moove
Moove Faces Losses Amidst Shifting Legal Landscape; Cosan’s Consolidated Results
Moove, the lubricants division of Brazil’s Cosan, faced challenging circumstances as it recorded a significant net loss of 119.2 million reals (U.S. $24.1 million) in the first quarter. This contrasts with the consolidated net income of 101.9 million reals during the same period last year. Cosan as a whole experienced a consolidated net loss of 904.1 million reals for the quarter. The loss was primarily attributed to the one-time impact of excluding the Tax on the Circulation of Goods and Services benefit in the calculation basis for Corporate Income Tax and Social Contribution on Net Income at Comgas and Moove, totaling 1.5 billion reals.
In early 2021, these companies made the decision to recognize payable tax credits based on the guidance of their external legal advisors and prevailing jurisprudence at that time. However, a shift occurred when the Superior Court of Justice ruled differently in April 2022, unfavorable to taxpayers.
Order : rubber process oil
As a result, we reclassified the probability of loss from remote to possible, reflecting this change in our financial statements since the second quarter of 2022. Subsequently, there was a trial at the STJ in April with an unfavorable outcome for taxpayers, leading the company to establish a provision of approximately 1.5 billion reals.
Net revenue surged by 47% to reach 2.6 billion reals. The combined sales volume of lubricants and base oils experienced a significant increase of 84% in the first quarter, rising from 78,000 metric tons to 143,000 metric tons.
Since its establishment in 1936 as a producer of sugar and ethanol, Cosan has expanded through acquisitions to become a prominent distributor of fuels and lubricants. Moove, operating under the Mobil and Comma brands, extends its presence in Brazil, South America, Europe, and the United States, catering to automotive and industrial sectors. The company imports and distributes base oils in the Brazilian market.
Perimeter Solutions
Perimeter Solutions, based in Clayton, Missouri, witnessed a significant decline in adjusted earnings before interest, taxes, depreciation, and amortization for its specialty products segment, amounting to a 58% decrease to $6.5 million in the first quarter. Net sales also experienced a substantial drop, reaching $25.1 million, a decline of 36%.
CEO Haitham Khouri explained that while the first quarter results showed improvement in end-market demand for their Specialty Products business compared to the previous quarter, it remained relatively soft compared to normal levels.
The specialty products division of Perimeter Solutions focuses on the production and sale of phosphorus pentasulfide, primarily utilized in the manufacturing of lubricant additives, including zinc dialkyldithiophosphates that offer anti-wear protection to engine components. The company operates manufacturing facilities for this chemical in Sauget, Illinois, and Hurth, Germany.
