Lanka IOC reports subdued performance

Lanka IOC PLC kicked off the March earnings season by reporting some subdued top and bottom-line performance for the 4Q25 period.

This could be attributable to fuel price cuts at the pump although mobility and industrial activities, which create demand for fuel continued to rise in line with the expansion in the economy.

The largest private sector distributor of oil reported revenues of Rs.67.10 billion in the January – March quarter, registering a decline of 10.7 percent from the same period in 2024.

However, the cost of sales fell a little faster by 11.3 percent to Rs. 61.54 billion, reflecting the muted prices for oil in the global market.

This helped the company to stretch its gross margin slightly to 8.3 percent from 7.7 percent in the year earlier period.

Besides automotive fuels, the company is also into lubricants blending and sales under its Servo brand and bitumen, petrochemicals and grease.

The company under its Trinco Petroleum Terminals Limited, a joint venture company with the Ceylon Petroleum Corporation is set to develop 61 oil storage tanks of the upper tank farm in Trincomalee as a strategic storage and bunkering hub of South Asia.

By improving the storage infrastructure, the company will be able to optimise its supply chain and reduce dependency on immediate imports and better manage market fluctuations.

By the end of March 2025, the company had Rs.43.74 billion of inventory, up from Rs.31.45 billion worth of inventory by the end of December 2024.

The company reported earnings of Rs.5.12 a share or Rs.2.73 billion for the March quarter, the company’s fiscal fourth quarter compared to Rs.6.43 a share or Rs.3.42 billion in the year earlier period.

For the full year ended in March 2025, the company reported earnings of Rs. 20.94 a share or Rs.11.15 billion compared to Rs.26.19 a share or Rs.13.94 billion in the previous financial year.

The company’s share ended Rs.5.00 or 3.97 percent higher at Rs.131.00.

In a highlight of the quarter, the company has invested Rs.15.40 billion in what they call as long term investments. Short term investments were down to Rs.29.52 billion from Rs.47.19 billion by the end of December 2024.