Fuchs Petrolub SE, the world’s largest independent lubricant supplier, reported a 15% increase in profits after tax in 2021 – reflecting recovery from COVID-19’s initial economic impacts in 2020 and an improvement on 2019’s earnings.
Fourth quarter profits slid by almost 30%, though, as various disruptions and market factors impacted global supply chains and demand.
Full-year earnings after taxes rose to €254 million (U.S. $280.4 million), improving from €221 million, and was also up 11% from €228 million in 2019. Sales revenue grew 21% to €2.9 billion last year and was also up 12% from 2019.
In the fourth quarter, the Mannheim, Germany-based company’s earnings after taxes slipped 29% to €56 million, down from €79 million. Sales for the quarter were up 16% at €742 million.
For the full year, revenues were up in all regions. Revenue from Asia-Pacific increased 22% to €855, while that from North and South America rose 22% to €471 million. Sales in Europe, the Middle East and Africa grew 18% to €1.7 billion.
Fourth quarter revenues grew by 20% to €434 million in North and South America, by 15% to €218 million in in Asia-Pacific and by 12% to €127 million in Europe, the Middle East and Africa.
Like many companies in Europe and the Americas, Fuchs was hit hardest by the pandemic in 2020’s second quarter, when earnings after tax fell by 50% compared to the same period of 2019. Last year’s second-quarter after-tax earnings of 65 million was a 137% improvement, and sales for the period were up 42%. By 2021’s third quarter, a mix of different factors started to hinder profits, with earnings after tax down by 2% from the year-earlier period.
The company said it faced a myriad of adverse factors in 2021, which was marked by disruptions affecting its procurement markets.
“Extreme cold weather in Texas at the beginning of the year and the impact of the COVID-19 pandemic upset the balance of global supply chains,” Stefan Fuchs, chairman of Fuchs executive board, said in a letter to shareholders in its 2021 annual report. “An unprecedented shortage of raw materials and packaging materials, as well as sharply rising purchase prices, were the consequences, which resulted in new challenges for our team around the world on a daily basis.”
The continuing global shortage in semi-conductors had a negative impact on Fuchs’ automotive customers worldwide, he added.
“On top of this, towards the end of the year the Omicron variant and quarantine regulations put parts of our workforce out of action,” he said in the letter. “When seen against the backdrop of all these adversities, the gains in sales revenues and earnings achieved are all the more gratifying.”
Fuchs’ annual report included a breakdown of sales revenue by product group. The €2.9 billion revenue in 2021 included €1.3 billion in automotive lubricants – mainly engine oils, gear oils and shock absorber fluids – which was a 22% increase from 2020. Sales revenue from industrial lubricants and specialties – mainly metalworking fluids, corrosion preventatives, hydraulic and gear oils, greases and other specialty products – increased 19% to €1.5 billion. The other operational segment – mainly toll blending, chemical process management and trade activities – climbed 28% to €92 million.