NewMarket Corporation (NYSE) Chairman and CEO Thomas E. Gottwald has released the earnings report for the Company’s operations for the third quarter and the first nine months of 2024.
For the third quarter of 2024, NewMarket reported a net income of $132.3 million, or $13.79 per share, up from $111.2 million, or $11.60 per share, in the same period last year. For the first nine months of 2024, net income reached $351.7 million, or $36.66 per share, compared to $308.5 million, or $32.05 per share, in 2023.
In the petroleum additives segment, sales for Q3 2024 were $663.0 million, slightly down from $663.7 million in Q3 2023. However, operating profit for this segment increased to $157.5 million from $139.8 million a year earlier, primarily due to reduced raw material and operating costs, despite lower selling prices.
For the first nine months, petroleum additives sales remained steady at $2.0 billion for both 2024 and 2023. Operating profit for the segment increased to $456.2 million, up from $404.0 million in the same period last year, driven by lower raw material and operating costs and increased shipments. Shipments rose by 1.8%, with growth in both lubricant additives and fuel additives.
“We are pleased with the strong performance of our petroleum additives business during the first nine months of 2024,” Gottwald said. “Our ongoing focus on margin management continues to yield positive results. We will maintain our emphasis on managing operating costs, inventory levels, and portfolio profitability throughout the year.”
NewMarket completed the acquisition of American Pacific Corporation (AMPAC) on January 16, 2024, and has reported its financial results under the specialty materials segment since the acquisition date. Specialty materials sales reached $59.1 million for Q3 2024 and $114.2 million for the first nine months, with operating profit of $16.0 million for both periods. The results for the specialty materials segment reflect the sale of AMPAC finished goods inventory acquired at closing, which generated no margin.
Due to the nature of AMPAC’s business, NewMarket expects significant quarterly variations in results but anticipates that full-year 2024 results will align with pre-acquisition expectations.
The Company generated strong cash flows in the first nine months of 2024, paying dividends of $72.0 million and funding capital expenditures of $42.7 million. Since the AMPAC acquisition, NewMarket has made net payments of $259.0 million on its revolving credit facility. As of September 30, 2024, the Net Debt to EBITDA ratio stood at 1.4, slightly below the target operating range of 1.5 to 2.0.
Gottwald expressed gratitude to the dedicated employees for their efforts in integrating AMPAC into the NewMarket family. “Our team continues to prioritize long-term value for our shareholders and customers, focusing on our core principles: a long-term view, a safety-first culture, customer-centric solutions, technology-driven products, and world-class supply chain capabilities,” he stated. “We believe these fundamentals will benefit all our stakeholders.
