Lanka IOC kicks off September earnings with higher profits

Kicking off the September quarter earnings season this week, Lanka IOC PLC reported some higher profits for the foregoing three months, likely setting the tone for the rest of the earnings which are yet to come in the next few days and weeks.

Lanka IOC PLC reported revenues of Rs.70.36 billion for the July – September quarter, down 4 percent from the same period a year ago,  but the earnings were up by 17 percent to Rs.2.96 billion.

The earnings per share was Rs.5.55 for the quarter, up from Rs.4.74 a share from a year ago.

For the six months that ended in September 2025, the company reported earnings of Rs.9.92 a share or Rs.5.28 billion compared to Rs.11.83 a share or Rs.6.30 billion in the same period in 2024.

The revenue however rose by 13 percent from the previous quarter, reflecting rising volumes as the mobility levels and the economy expanded.

The company’s share ended at 2.49 percent or Rs.3.25 higher at Rs.134.00 at yesterday’s closing.

Besides fuel sales, the company is also the second largest player in the lubricant market in Sri Lanka under the Servo brand and offers bunkering services, bitumen and petrochemicals.

The revenue slippage from a year-on-year basis appears to have been caused by the lower prices at the pump during the period compared to the year earlier period as the government cut prices repeatedly in line with the softening global oil prices.

During the last one year, the prices at the Brent futures exchange for oil was down from around US$ 74.45 a barrel to US$ 62.33 a barrel today.

The company has also been trimming its inventory in an attempt to bring its inventory close to the current prices which are mostly lower and thus increase its profits.

By the end of September, the company had investments worth of Rs. 28.04 billion, down from Rs.31.49 billion in June and Rs.43.73 billion at the beginning of the financial year.

The cost of sales was down by 5.81 percent to Rs.64.62 billion for the quarter.

At the operating levels, the company posted a profit of Rs.2.50 billion, up by a robust 32 percent from a year ago.

The company has also earned an interest income of Rs. 1.31 billion in the three months, slightly down from Rs.1.45 billion in the year earlier period.

This was amid the company adding Rs.13.09 billion into its both long term and short term investments which together amounts to Rs. 58.01 billion.