Q2 2023 NewMarket Corp Earnings Call
Participants
William J. Skrobacz; VP & CFO; NewMarket Corporation
Presentation
Operator
Good day, everyone, and welcome to the NewMarket Corporation conference call and webcast to review second quarter 2023 financial results.
(Operator Instructions)
It is now my pleasure to turn the floor over to your host, Bill Skrobacz. Sir, the floor is yours.
William J. Skrobacz
Thank you, Matthew, and thanks to everyone for joining me this afternoon. As a reminder, some of the statements made during this conference call may be forward-looking. Relevant factors that could cause actual results to differ early from those forward-looking statements are contained in our earnings release and in our SEC filings, including our most recent Form 10-K.
During this call, I will also discuss the non-GAAP financial measures included in our earnings release. The earnings release, which can be found on our website, includes a reconciliation of the non-GAAP financial measures to the comparable GAAP financial measure. We filed our 10-Q this morning. It contains significantly more details on the operations and performance of our company. Please take time to review it. I will referring to the data that was included in last night's earnings release.
Net income for the second quarter of 2023 was $100 million or $10.36 a share compared to net income of $66 million or $6.54 a share for the same period in 2022. Petroleum additives net sales were $684 million compared to $721 million for the second quarter of last year. Petroleum additives operating profit for the quarter was $132 million compared to $91 million for the second quarter of 2022.
The profit increase was mainly due to increased selling prices, partially offset by lower shipments and higher operating costs. Shipments between quarterly periods were 17% -- excuse me, down 17%, with decreases in both lubricant additives and fuel additive shipments. All regions contributed to the decrease in lubricant additive shipments, while North America was the primary contributor to the decrease in fuel additive shipments. Shipments did increase slightly in the second quarter compared to the first quarter.
Shipments have been lower than our expectations over the last 3 quarters as we continue to see the effects of a general economic slowdown and customer destocking. Supply disruptions and rapid oil price movements as well as customer expectations about future pricing can all contribute to destocking and restocking. While we have seen wide variation in customer order patterns and demand over the past few years, the end use of our products does not change significantly.
Petroleum additives operating margin for the rolling 4 quarters ended June 30th was 16.8%, which is back within our historical range and reflects the benefits of our focus on cost control and margin recovery. However, we are still challenged by higher operating costs due to the ongoing inflationary environment. Cost control and margin management remain high priorities for us.
We generated solid cash flows during the quarter and continue to operate with low leverage. Our working capital improved by $43 million. We paid dividends of $22 million, which included a 7% increase to our quarterly dividend rate, and we repurchased $14 million of our common stock. Our net debt to EBITDA was 1.4x as of June 30, 2023, a significant improvement over the 2x we reported at the end of 2022.
For 2023, we expect to see capital expenditures in the $50 million to $60 million range. This is slightly lower than our previous range due to the operational timing of some of our projects. We remain focused on the long-term success of our company, including emphasis on satisfying customer needs, generating solid operating results and promoting the greatest long-term value for our shareholders customers and employees. We believe the fundamentals of how we run our business, our long-term view, safety and people first culture, customer-focused solutions, technology-driven product offerings and a world-class supply chain capability will continue to be beneficial for all our stakeholders. Thank you for joining me for the call today. Matthew, that concludes our planned comments. We are available for questions via e-mail or by phone. So please feel free to contact me directly. Thank you all again, and we will talk to you next quarter.
Operator
Thank you, everyone. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.
