Chevron Lubricants Lanka PLC, the local unit of US-based multinational, saw its March quarter (1Q16) net profit rising as much as 33 percent year-on-year (yoy) to Rs.985.9 million, amid improved gross margins.
The revenue for the quarter rose 11 percent yoy to Rs.3.1 billion while cost of sales edged down 1 percent yoy to Rs.1.6 billion, resulting in a gross profit of Rs.1.52 billion, up 27 percent yoy.
The earnings per share for the period improved to Rs.8.22 from Rs.6.19.
A two percent distribution cost also helped the company to post an operating profit of Rs.1.3 billion, up 30 percent yoy, despite a 23 percent rise in administrative expenses.
The company’s income tax expense also rose 25 percent yoy to Rs.357.3 million.
Chevron Lanka said it would pass on the impact created by VAT increase on the company to the customers. Government raised the VAT rate from 11 percent to 15 percent and removed the NBT exemption prevailed for lubricants.
Meanwhile, Chevron Lanka recently announced a decision to increase the number of shares by way of share sub-division, subject to shareholder approval. Accordingly, each existing share will be split to two ordinary shares, the company said in a stock exchange filing.
Chevron accounts for over 50 percent of the country’s 55 million litre lubricant market.
The company is expecting relatively slower growth this year due to exchange rate volatilities and lower vehicle imports due to higher import taxes.