Lanka IOC PLC (LIOC) swung to a heavy loss of Rs.986.9 million or Rs.1.85 a share during the three months ended December 2018 (3Q19) as Sri Lanka’s only private sector fuel distributor saw its cost of sales rising faster than sales.
The company lost Rs.340.1 million or 64 cents a share during the same period last year, and reported a profit of Rs.207.3 million or 39 cents a share during the previous quarter ended September 2018.
The revenues rose 5.0 percent year-on-year (YoY) to Rs.23.1 billion, but the cost of sales rose by 6.0 percent YoY to Rs.23.06 billion.
This resulted in a narrower gross profit of Rs.67.5 million for the three months under review compared to Rs.277.8 million YoY.
Just days after President Maithripala Sirisena appointed former President Mahinda Rajapaksa as the Prime Minister on October 26 triggering a constitutional crisis, fuel prices were slashed abandoning the pricing formula.
However, this created a gap between the retail prices of State-owned Ceypetco and LIOC, which sold its fuel slightly above Ceypetco’s price.
Fuel prices came down close to 40 percent during October-December period at Brent futures exchange, the global benchmark for oil. Currently the oil prices are hovering around US $ 53.69 a barrel at Brent, up 18 percent year-to-date.
LIOC’s operating profit during the quarter under review was Rs.794.3 million compared to Rs.491.5 million YoY.
Pricing formula was restored after the constitutional crisis that ended in mid December, bringing sanity to the markets.
LIOC’s finance costs also rose sharply to Rs.249.5 million from Rs.52 million, a year ago.
The company had stocks worth of Rs.10.5 billion by end of December, 2018, down from Rs.18.8 billion in September.
Meanwhile, for the nine months ended December 31, 2018, the company lost Rs.1.00 a share or Rs.533.7 million from Rs.1.22 a share or Rs.652.2 million loss recorded for the same period last year.
The top line was flat at Rs.67.8 billion for the nine months.
Indian Oil Corporation Limited, India owns 75.12 percent stake in Lanka IOC PLC.