29 October 2018 10:26 am
Lanka IOC PLC reported profits for the quarter ended September 30, 2018 (2Q19) against a loss made in the same quarter last year, indicating that the automatic fuel pricing formula in place has helped the company to stabalise its performance.
LIOC, the local unit Indian Oil Company, reported earnings of 39 cents a share or Rs.207.3 million in total earnings for the July-September period compared to a loss per share of 33 cents or a total loss of Rs.176.9 million reported for the same period, last year. However, the profits came down from Rs.245.9 million or 46 cents a share reported for the previous quarter ended in June.
The performance during the first two quarters reflects how the cost-reflective fuel pricing formula has helped the company to stabilise its performance.
Sri Lanka introduced the cost-reflective fuel pricing formula this May in line with the agreement with the International Monetary Fund (IMF).
The government last revised its fuel prices on October 10 to reflect the rising oil prices at the Brent futures exchange— the international oil benchmark.
The next price revision is due on November 10. But the implementation is now at risk with the current political deadlock.
Meanwhile, the company reported revenues of Rs.25.6 billion for the quarter under, up from Rs.25 billion a year ago.
Cost of sales also remained almost unchanged at Rs.24 billion.
There was a sharp increase in the finance cost during the quarter to Rs.546.2 million from just Rs.48 million in the corresponding quarter of the last year.
Lanka IOC PLC, the only private sector importer and distributor of refined petroleum products in the country, has three storages in Kolonnawa, Muthurajawela and Trincomalee.
Meanwhile, LIOC is seen gradually increasing its refined oil storage after the country ran out of fuel last year when the government sent back a ship containing inferior quality fuel.
The inventories rose to Rs.18.8 billion from Rs.12.8 billion by the end of June and from Rs.10.1 billion in March.
For the six months ended in September, Lanka IOC reported earnings of 85 cents a share or Rs.453.2 million compared to a loss per share of 59 cents or a loss of Rs.312.1 million reported for the same period, last year.
The revenue was Rs.44.7 billion, up from Rs.45.5 billion.
Indian Oil Corporation Limited owns 75.12 percent stake in Lanka IOC PLC.