8 Sept 2026
Xinxiang Richful Lube Additive Co., Ltd. recorded strong growth in revenue and profit during the first half of 2026, despite facing sanctions imposed by the European Union. The Chinese lubricant additives producer is also pursuing legal action in Europe to have its designation removed.
For the six months ending 30 June 2026, Richful’s revenue climbed 16.8% from the same period last year to CNY1.94 billion (USD289 million), according to its half-year financial report submitted to the Shenzhen Stock Exchange on 26 August. Net profit attributable to shareholders rose 12.1% to CNY414.8 million (USD61.7 million). Profit excluding non-recurring items reached CNY381.9 million (USD56.8 million), representing an increase of 7.8% year-on-year.
The figures also indicate a significant improvement from the company’s first-quarter performance. Richful reported a 28.2% decline in first-quarter net profit, which stood at CNY139.9 million (USD20.8 million). Based on its half-year results, second-quarter profit was approximately CNY275 million (USD41 million), more than 50% higher than the corresponding period in 2025.
Despite the improvement in earnings, cash generation weakened. Net cash from operating activities moved to an outflow of CNY92.9 million (USD13.8 million), compared with an inflow of CNY206.4 million (USD30.7 million) in the first half of 2025. Richful attributed the change primarily to increased accounts receivable and inventory levels. Its total assets reached CNY5.60 billion (USD833 million) at the end of June.
Company challenges EU designation
Richful was placed on the EU’s Russia-related sanctions list by the Council of the European Union on 15 June 2026. The EU alleged that the company had supplied chemical additives used in lubricants for Russian military applications. The designation includes an asset freeze within the EU and prohibits EU entities from providing funds or economic resources to the company.
According to Richful, its sales to customers in the EU amounted to around CNY142 million (USD21.1 million) in 2025, equivalent to approximately 4% of its total revenue.
The company has begun both administrative and legal proceedings to contest the decision. In a customer communication issued on 28 August, Richful said it had appointed a European law firm with expertise in sanctions regulations and proceedings before the EU General Court. Richful submitted a request for reconsideration to the Council on 22 July. It subsequently filed an annulment action with the General Court of the European Union in Luxembourg on 24 August. The company said the court accepted the case two days later, on 26 August. It has not released further information about the proceedings, citing the ongoing legal process. The General Court is the EU’s first-instance judicial body for a range of direct actions, including cases brought by companies and individuals against decisions taken by EU institutions.
Richful seeks support from Chinese authorities
Alongside its legal challenge, Richful said it has been communicating with China’s Ministry of Commerce and Ministry of Justice regarding the sanctions. The company stated that the Ministry of Commerce considers the matter important and has indicated that it may provide support through diplomatic channels. Richful has submitted its factual statement and position concerning the EU designation to the ministry for potential transmission to EU authorities. It is also working with the Ministry of Justice on legal advice and coordination between relevant government agencies.
Richful maintains that the allegations behind the sanctions are incorrect. In its letter to customers, the company said its products are civilian lubricant additives and stated that it had stopped Russia-related business in January 2025. The company added that it continues to meet existing orders and contractual obligations and said it remains focused on supplying customers in international markets. Headquartered in Xinxiang, Henan province, Richful manufactures lubricant additive components and additive packages used in engine and industrial lubricants. The EU Council's designation identifies the company as one of China's major lubricant additive manufacturers and distributors. The detailed article is published by https://www.fuelsandlubes.com/ can be accessed from https://www.fuelsandlubes.com/richful-first-half-profit-up-12-as-it-contests-eu-sanctions/
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