Sri Lanka’s Laugfs Gas losses deepen from price controls, rupee depreciation
ECONOMYNEXT – Sri Lanka’s listed Laugfs Gas Plc said it made a loss of 311.9 million rupees in the September 2018 quarter, down 873 percent from a profit of 40.3 million rupees a year earlier, due to price controls on domestic LPG cylinders and forex losses from currency depreciation.
The loss was 81 cents a share for the quarter. In the six months to end September 2018, the loss per share was 1.45 rupees on a loss of 559.3 million rupees, which had deepened 35 percent from a year earlier, interim accounts filed with the Colombo Stock Exchange showed. Laugfs gas was trading unchanged at 17 rupees on Monday.
"It should be noted that as a result of the Rupee depreciating rapidly against the US Dollar, coupled with the company having to operate its business of LPG downstream under the prevailing retail price restrictions whilst LPG prices in the global market are surging, the finances for this quarter have recorded losses," Chairman and Group Chief Executive W.K.H. Wegapitiya told shareholders.
"In order to address this current situation, the company is in a continuous dialogue with the Consumer Affairs Authority in order to ensure that LPG retail prices are revised in line with global market prices by adhering to the existing pricing formula.
"Whilst we are confident that we will receive a positive response in this regard, the company has concurrently sought advice on seeking legal redress in order to ensure its rights," he said.
In the quarter, revenue grew 11 percent from a year earlier to 6.2 billion rupees, cost of sales increased a faster 18 percent to 5.6 billion rupees which contracted gross profits by 28 percent to 586.9 million rupees.
Other operating income grew 22 percent 139.7 million rupees. Selling and distribution expenses fell 10 percent to 337.7 million rupees and administrative costs declined 10 percent to 223.4 million rupees.
The company reported a forex loss of 55.5 million rupees in the quarter, down 322 percent from a gain of 25 million rupees a year earlier.
Net finance cost grew 15.6 percent to 440 million rupees.
In the six months to end September, Laugfs Gas Plc’s energy segment saw losses decline 87 percent from a year earlier to 85.5 million rupees while profits from overseas operations grew 54 percent to 170 million rupees.
Its property segment saw earnings fall 17 percent to 23 .5 million rupees.
Transport and logistics reported a loss of 11.4 million rupees, down 117 percent from a profit of 76 million rupees a year earlier. Trading losses expanded 106 percent to 137.8 million rupees.
The company said it would soon commence operations at an LPG transhipment terminal facility in the Port of Hambantota. (COLOMBO, 19 November 2018)