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Saturday March 2nd, 2024

Sri Lanka’s IOC unit reports Rs12.3 bn in Sept 2022 profits

ECONOMYNEXT- Profit in Lanka IOC, a unit of Indian Oil Corporation, skyrocketed in September quarter helped by fuel price hike and higher supply by the company in the three months due to heavy demand after a foreign exchange shortage forced the state-run fuel to import less.

The net profits jumped 43 times in the three months ended on September 30 to 12.3 billion rupees, compared to a 281 million rupees in the same quarter last year.

The quarter saw long queues for fuel before the government came up with a fuel rationing. Lanka IOC’s revenue has improved more than three times in the quarter from a year ago.

The earnings per share in the quarter were 23.21, compared to 0.53 rupees last year.

The firm’s share closed 5.9 percent down at 191.50 rupees at the close of trading on Friday.

Revenue for the September quarter jumped 327 percent to 87.9 billion rupees from a year earlier, while
the cost of sales rose 267 percent to 71.6 billion rupees, leading to a gross profit of 16 billion rupees in the quarter, compared to the last year’s 1.08 billion rupees.

The  operating profit was 14.1 billion rupees for the quarter, up from 268 million a year earlier.

LIOC has about 10 to 15 percent of the fuel market in Sri Lanka.

It raised fuel prices in the second quarter in line with the state-run fuel retailer due to sharp depreciation of the currency coupled with high global oil prices.

The company was able to raise the prices in line with the state fuel retailer Ceylon Petroleum Corporation (CPC) after Sri Lanka brought in a price formula for the petroleum products to prevent losses.

LIOC total assets increased by 13.9 billion rupees in the quarter to 79 billion rupees.

LIOC finance income in the September quarter increased to 548 million rupees, up 61.7 percent from a year earlier and finance expenses fell to 193 million rupees from 294 million rupees resulting in a profit before tax of 14.5 billion rupees.

The firm also entered into joint venture agreement with the CPC in January, to invest in 49 percent shares of Trinco Petroleum Terminal (Pvt) Ltd, a joint venture company between the two firms owned by Indian and Sri Lankan government. The deal is expected to develop 61 oil tanks in Trincomalee China Bay Oil Tank Farm though there was no further progress has been made. (Colombo/Oct 28/2022)

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Sri Lanka eyes SOE law by May 2024 for better governance

ECONOMYNEXT – Sri Lanka is planning to pass a Public Commercial Business (PCB) Act improve governance of state-owned enterprise by May 2024 as part of an anti-corruption efforts following an International Monetary Fund assessment.

Sri Lanka’s state enterprises have been used by politicians to give ‘jobs of the boys’, appropriate vehicles for personal use, fill board of directors and key positions with henchmen and relatives, according to critics.

Meanwhile macro-economists working for the state also used them to give off-budget subsides or made energy utilities in particular borrow through supplier’s credits and state banks after forex shortages are triggered through inflationary rate cuts.

The government has taken billons of dollars of loans given to Ceylon Petroleum Corporation from state banks.

There have also been high profile procurement scandals connected to SOEs.

An SOE Reform Policy was approved by Sri Lanka’s cabinet of ministers in May 2023.

The Public Commercial Business (PCB) Act has now been drafted.

A holding company to own the SOEs will be incorporated and an Advisory Committee and Board of Directors will be appointed after the PCB law is approved, the statement said. (Colombo/Mar01/2024)

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Sri Lanka rupee closes at 308.80/90 to the US dollar

ECONOMYNEXT – Sri Lanka’s rupee closed at 308.80/90 to the US dollar Friday, from 309.50/70 on Thursday, dealers said.

Bond yields were broadly steady.

A bond maturing on 01.02.2026 closed at 10.65/75 percent up from 10.50/70 percent.

A bond maturing on 15.09.2027 closed at 11.90/12.05 percent from 11.90/12.10 percent.

A bond maturing on 01.07.2028 closed at 12.15/35 percent down from 12.20/25 percent.

A bond maturing on 15.07.2029 closed at 12.25/40 percent up from 12.30/45 percent.

A bond maturing on 15.05.2030 closed at 12.30/45 percent down from 12.35/50 percent.

A bond maturing on 01.07.2032 closed at 12.50/13.00 percent from 12.55/13.00 percent. (Colombo/Mar1/2024)

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Sri Lanka stocks close up 0.37-pct, Expo to de-list

ECONOMYNEXT – The Colombo Stock Exchange closed up 0.37 percent on Friday, and SG Holdings, the parent company of Expolanka Holdings Plc, said it was taking the company private.

Expolanka is the largest listed company on the Colombo Stock Exchange.

“Expolanka Holdings PLC has, at the Board Meeting held on 1st March 2024, considered a request from its principal shareholder and resolved to initiate the de-listing of the Company’s shares from the Official List of the Colombo Stock Exchange subject to obtaining necessary shareholder approval and regulatory approvals,” the company said in a stock exchange filing.

As per arrangements with SG Holdings Global Pte Ltd, the Company’s majority shareholder, it will purchase its shares from shareholders who may wish to divest their shareholding in the Company at a purchase price of Rs 185.00 per share. The share closed up at 150.50.

The broader All Share Index closed up 0.37 percent, or 39.47 points, at 10,691; while the S&P SL20 Index closed down 0.64 percent, or 19.59 points, at 3,037.

Turnover stayed above the 1 billion mark for the sixth consecutive day, registering 1.4 billion.

Crossings in Melstarcorp Plc (135mn) up at 89.50, Hatton National Bank Plc (64mn) up at 158.00, Hemas Holdings Plc (53mn) up at 75.00 and Central Finance Company Plc (26mn) up at 103.50, added significantly to the day’s turnover.

“The upward trend is continuing, with more retail buying also coming in, the number of trades was more than 10,000 today,” a market participant said. “Investors are looking for undervalued stocks and buying in quantities.” (Colombo/Mar1/2024).

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