Financial Results and Public Companies and Oil and Calumet Specialty Products and Transportation, Distribution & Logistics

Reduced production drives Calumet to a loss

May 5, 2010

High crude oil prices and lower production hurt the bottom line at Calumet Specialty Products Partners LP, which Wednesday reported a $13.1 million first-quarter loss. It posted a $75.6 million profit in the first three months of 2009.

The Indianapolis-based refiner and processor of specialty lubricants said it was affected by reduced production and a nearly 92 percent increase in the average cost of crude oil per barrel. Calumet lowered production because of what it said were the “poor economics of running additional barrels.”

"We chose to operate our facilities at reduced rates during the first quarter of 2010,” CEO Bill Grube said in a prepared statement, but economic conditions appear to be improving. “We have seen a continued increase in demand for our specialty products and expect to increase production rates at all of our facilities during the second quarter.”

The company also wrote off $47.5 million in unrealized derivative gains.

Total revenue was $484.6 million, up 17 percent from the first quarter of 2009. Selling expenses were up 35 percent, to $452.9 million.

Last month, Calumet won a $132 million federal contract to supply aviation fuel to the Defense Energy Support Center at Fort Belvoir, Va. That deal runs through April 30, 2011.

 

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