Chevron’s second quarter for 2017 was affected by weather anomalies, rising raw material prices and advanced buying in expectation of a price increase, Gomes said.
Chevron’s net profits fell 34 percent YoY to Rs.525.90 million, while revenue fell 19 percent YoY to Rs.2.28 billion.
“The main reasons were the raw material cost increase in the global market and the dollar increase,” Gomes said. He noted that raw material prices increased 25 percent YoY. Given the trend, he said that the buyers had stockpiled lubricants at the end of the first quarter, anticipating a price increase.
“There were discussions in the market and there was some last-minute buying, so April was bad,” he added.
However, Gomes said that Chevron increased prices by just 12 percent, passing on only half of the cost increase to customers.
He added that weather-induced disruptions also contributed to the subdued performance.
“In one side of the country there were floods, which made medical supplies and food the main concern and vehicles a secondary thought. In another part of the country, the agriculture zones, there was a drought. Paddy cultivation got affected and there was less demand for lubricants for their machinery,” he said.