Ending the long declining streak in earnings, Chevron Lubricants Lanka PLC yesterday reported some solid top and bottom line performance for the quarter ended September 30, 2019 (3Q19) as the fortunes of the market leader in lubricant sales appeared to be changing under its new leadership.
Chevron Lubricants reported earnings of Rs.2.59 a share or Rs.622.3 million for the July–September quarter compared to Rs.2.15 a share or Rs.516.5 million reported for the same period last year, which is a 20 percent year-on-year (YoY) growth.
The firm’s top line during the period under review rose 15 percent YoY to Rs.3.3 billion.
Sri Lanka’s lubricant sales data available up to June showed a contraction in the market to 14, 852 kilo litres from 16, 228 kilo litres in the same period a year ago.
However, Chevron Lubricant’s market share improved to 40.88 percent from 38.46 percent during the two periods, but the volumes sold declined slightly.
For multiple quarters, Chevron’s earnings have been declining as some emerging players have started to gradually eat into its market share through cheap alternatives.
The Sri Lankan lube market has become extremely price-sensitive with the entry of many new players.
Meanwhile, for the nine months ended in September 30, the company reported earnings of Rs.6.94 a share or Rs.1.66 billion in total earnings compared to Rs.7.17 a share or Rs.1.72 billion in the corresponding period a year ago. In September 2018, the company appointed Patrick McCloud as its new Chief Executive Officer, who has held leadership roles in the group’s global supply chain management. Chevron Lubricant’s share was a highly battered stock, yet it gained Rs.1.20 or 1.88 percent yesterday to close at Rs.65.00.
The company announced an interim dividend of Rs.2.25 a share after close of trading.
Chevron Ceylon Limited has 51 percent stake in the company.