26 April 2011 22:24 [Source: ICIS news]
TORONTO (ICIS)--US-based ?xml:namespace>
“We continue to improve our pricing practises to maintain margins” as commodity prices are pushing all-time highs, O’Brien told analysts during the company’s fiscal 2011 second-quarter results conference call.
"As we go into April, May and June ... the challenges we continue to face will be around margin recovery," he said.
Ashland's Valvoline automotive lubricants business would be "particularly challenged", he added.
In that business,
“Successfully dealing with cost increases is nothing new for [the Valvoline] business,” he added.
In fact, through 31 March, the business successfully overcame six consecutive cost increases since July 2009 for base oil alone, he said.
Since July 2009, base oil prices increased by more than $1.50/gal, or roughly 65%, resulting in an annualised “headwind” for Ashland of about $200m (€138m), he said.
“Throughout this period, the business recovered its costs, albeit with a typical time lag, and we fully expect this performance to continue,” O’Brien said.
In Ashland’s fiscal 2011 second quarter ended 31 March, Valvoline saw gross profit margin fall to 29.3%, down 370 basis points year on year and 160 basis points from the preceding fiscal first quarter, because of the 25 cent/gal base oil cost increase effective on 1 January.
In related news on Tuesday, ICIS reported that
($1 = €0.69)
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