Revenue jumped and profit surged at Chevron Lubricants Lanka PLC during the three months ended December 31, 2019 (4Q19) as the company reported two quarters of positive results, ending a prolonged weak performance.
Sri Lanka’s lubricant market leader reported revenues of Rs.2.5 billion for the quarter under review, up 15 percent year-on-year (YoY).
This is the second consecutive quarter where the company was able to record double digit expansion in the top line in a market fraught with intense competition and an economy which was losing steam.
Currently, there are 13 licensed lubricant players while the industry was also liberalised under the previous government, which resulted in mushrooming of lubricant importers.
Sri Lanka’s lubricant market sales data available up to June last year showed a contraction in the market to 14, 852 kilo litres from 16, 228 kilo litres in the same period a year ago.
However, Chevron Lubricant’s market share rose to 40.88 percent from 38.46 percent during the two periods but the volumes sold declined slightly.
The strong top line is an indication that the company has found the right strategy after prolonged spell of declining sales and market share.
The current dry spell of weather could also bode well for Chevron as it generates demand for lubricants to run the country’s multiple thermal power plants.
The company, which markets lubricants under Caltex brand, reported an operating profit of Rs.597.1 million, up 62 percent YoY.
The company reported earnings of Rs.1.81 a share or Rs.434.6 million for the quarter under review compared to earnings of Rs.1.13 a share or Rs.271.2 million in the corresponding period of previous year, registering a 60 percent growth in the bottom line.
Meanwhile for the year ended December 31, 2019 (FY19), the company reported earnings of Rs.8.75 a share or Rs.2.1 billion compared to earnings of Rs.8.30 a share or Rs.1.99 billion in FY18.
The total revenue for the year was Rs.11.9 billion, up 9 percent YoY.
The company’s share ended 10 cents or 0.14 percent higher at Rs.72 yesterday.
Chevron Lubricant Lanka is one of the few companies doing lubricant blending in Sri Lanka.
The firm’s parent, Chevron Corporation is a multinational company, which engages in both upstream and downstream segments of energy and chemical operations.
Chevron Ceylon Limited holds 51 percent stake in Chevron Lubricants Lanka PLC as the controlling shareholder.