Chevron impacted by flood; aims to manage costs
View(s):Chevron Lubricants Lanka PLC says that the recent floods have impacted their business badly and the motor industry at large. ”Many cars and vehicles were under water and the month of May was at a standstill where business was concerned,” Kishu Gomes, Managing Director/CEO of the company told the Business Times. He said that the company’s main focus is on cost management to redeem itself from this situation. The company’s top line grew 11 per cent YoY to Rs. 3.12 billion in Q1 FY 16 aided by demand across industrial and automobile sectors from both local and export sales. The company offered discounts and promotions to share the benefit of lower base oil prices, resulting in higher v volumes.
The company achieved its highest Gross Profit (GP) and EBIT (earnings before interest and tax) margins so far in Q1 FY16, with the GP margin at 48.7 per cent (Q1 FY 15 million- 42.5 per cent) and EBIT margin at 41. 6 per cent (Q1 FY 15 – 35.5 per cent). Such an achievement was realised, as the company shifted its focus from maintaining market share to margin share, coupled with savings from lower base oil prices, despite the sluggish industry growth climate, analysts said.