Chevron reports a solid June quarter on sales and focuses on margin expansion

Chevron Lubricant Lanka PLC reported some solid top and bottom-line performances for the three months through June 30. 

This is as the company continued to extend its focus on margins, pursue aggressive growth strategy in its two export markets while seeing increased demand generated from a humming domestic economy.

The company reported revenues of Rs.5.68 billion for the April-June period, the company’s fiscal second quarter, up 7.5 percent from the same period last year.

The leader in Sri Lanka’s lubricant market continued to focus on its margin expansion strategy as it did in the recent periods, since the company managed to stretch its gross margin to 35.9 percent in the June quarter, from 32.5 percent in the year earlier period.

The operating margin too expanded sharply to 24.0 percent, from 19.7 percent a year ago, reflecting disciplined overhead management.

Against this backdrop, the company reported earnings of Rs.4.12 a share or Rs.989.69 million for the June quarter, up 32.4 percent from Rs.3.12 a share or Rs.747.66 million reported in the same period in 2024.

Globally too, the United States-based Chevron Corporation, the second largest behind Exxon, is getting leaner and tougher on its employees, its rivals, political detractors and anyone else it encounters, after a study conducted on the company’s culture by the consulting firm MacKinsey, to prevent the company from falling behind its competitors.

“We’re working to further strengthen our culture with an even sharper focus on performance by executing faster and more efficiently, simplifying our organisation and delivering targeted innovation,” said Chevron Corp Chief Executive Mike Wirth.

Chevron Lubricant Lanka PLC is a high dividend paymaster, as it paid Rs.15.00 a share, paying 93 percent from last year’s profit of Rs.16.06 a share.

The company in June paid its first interim dividend of Rs.4.00 a share for the current financial year ending in December 2025.

The company’s stock ended at Rs.172.25 a share, advancing Rs.4.71 percent for the week.

The company engages in importing, blending, distributing and marketing of lubricants in Sri Lanka. Besides, the company also exports to Bangladesh and the Maldives.

After the subdued performance in these two markets in 2024, due to the political and economic uncertainties, the company expects to become more aggressive this year and more so in Bangladesh, as the country is recovering from a political upheaval last year, which caused a surge in inflation and currency volatility.

The topline of the company appeared to have been buttressed by the fast-recovering Sri Lankan economy in 2024 and 2025, as the mobility levels increased sharply while the industrial sector adding more heft.

In 2024, the company was able to retain all government tenders while pursuing new business relationships, especially in the construction and manufacturing sectors.

The ports, armed forces and government transport segments provided healthy volumes in 2024, although the rubber sector remained depressed, with a lower order book, due to the recessionary pressures in the European markets.

Power generation, especially thermal power, is another sector that generates a substantial amount of demand for the company, as it is lubricant intensive.

Chevron Ceylon Limited holds a 51.0 percent stake in the company.