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)