“The increase was primarily due to higher shipments and lower conversion costs, with lower raw material costs offset by decreased selling prices,” NewMarket Chairman and CEO Thomas Gottwald said in an earnings release. “Shipments increased 5.9 percent between periods, with increases in lubricant additives shipments, partially offset by a slight decrease in fuel additives shipments. Europe, North America and Latin America were the drivers for the lubricant additive increases, partially offset by a decrease in Asia Pacific.”

Sales for Richmond, Virginia-based NewMarket’s petroleum additives segment reached $557.4 million in the first quarter, up almost 5 percent.

Gottwald noted it expects the covid-19 pandemic to have impacts on its operations, including a “decrease in demand for lubricant and fuel additives, due to the economic downturn resulting from government restrictions on the movement of people, goods and services.

“We expect to see a sizeable decline in shipments in the second quarter of 2020,” he continued. “While we do not know how long this downturn will last, we are encouraged by the recovery we have seen in our China business, which saw a reduction in shipments in the first quarter but has already shown signs of recovery. We expect the rest of the global market will also begin to recover when government restrictions on the movement of people are eased. The rate of recovery will depend heavily on the rate at which these restrictions are lifted. Our global business will see varying effects on demand that will differ by region based on our product portfolio and geographic coverage.”

NewMarket reported net income of $85.5 million for the first quarter, or $7.67 per share, compared to net income of $62.2 million, or $5.57 per share, for the first quarter of 2019.

“We expect all our global operations, manufacturing plants and research and development centers will continue to be operational, and we will stay the course,” Gottwald added. “We are working diligently with our customers to ensure their supply demands are met and will continue to work with them throughout this period as inventory needs will be fluctuating due to demands of the changing environment.

“We will continue to focus on our long-term objectives and will remain well-positioned for the future with a strong balance sheet and conservative fiscal policy, even as we navigate the current economic downturn.”