23 February 2016 12:00 am
The local unit of Indian Oil Corporation Limited, Lanka IOC PLC, saw its December quarter (3Q16) net profit rising 44.6 percent year-on-year (YoY) to Rs.882.4 million.
The company appears to have benefitted from the falling global crude oil prices. The earnings per share (EPS) for the quarter rose to Rs.1.66 cents from Rs.1.15.
The revenue for the quarter declined 10.8 percent YoY to Rs.18.2 billion as the administered fuel prices remained low. But the cost of sales too fell 13.2 percent YoY to Rs.16.4 million reflecting the benefit of lower crude prices.
The gross profit for the quarter was Rs.1.71 billion, up 18 percent over the same period last year.
The energy experts opine the current low oil prices would either remain at these levels or fall further in the foreseeable future.
But some believe oil might rebound as falling prices have taken a toll on the global growth expectations and the oil producing nations are struggling to fund their national budgets.
Lanka IOC PLC however is prone to victimization due to the lack of a pricing formula and fuel price is a tool continuously manipulated by political masters to garner votes on their re-election bids.
Meanwhile, for the nine months ended December 31, 2015, the company made a net profit of Rs.680.2 million, a fall of 77 percent from 2014.
The earnings per share weakened to Rs.1.28 from Rs.5.53.
The revenue declined 17.5 percent to Rs.52.9 billion while the cost of sales fell 16 percent to Rs.49.8 billion.
The gross profit was down from Rs.5.1 billion to Rs.3.1 billion.
As of December 31, 2015, the Indian parent held a 75.12 percent stake in the company while Sri Lanka’s state-controlled private sector pension fund, the Employees’ Provident Fund (EPF), held a 0.33 percent stake being the 15th largest shareholder.
The EPF was seen cutting its stake in the company throughout the year from 0.58 percent, being the ninth largest shareholder by end-1Q16.