Lanka IOC PLC 4Q revenue up 9.3% YoY

• Full year revenue down 6.4%
• Reports full year corporate earnings of Rs.13.94 billion

Setting the stage for a busy earnings season in the coming weeks, Lanka IOC PLC (LIOC) last week reported higher revenues for the three months ended March 2024.
The only listed downstream operator in the conventional energy business reported revenues of Rs.75.1 billion for the January – March period, the company’s final fiscal quarter, up 9.3 percent from the same period in 2023.
On a quarterly basis too the revenues improved by 4.3 percent.

LIOC saw its cost of sales rising by 18.9 percent from a year ago to Rs.69.35 billion in the March quarter.
This left the company with a gross profit of Rs.5.75 billion, down from Rs.10.39 billion a year ago.
The company reported earnings of Rs.6.43 a share or Rs.3.42 billion for the quarter compared to Rs.13.48 a share or Rs.7.18 billion a year ago.

For the full year, the company reported earnings of Rs.26.19 a share or Rs.13.94 billion compared to Rs.70.79 a share or Rs.37.69 billion in the previous financial year.
Full year revenue was reported at Rs.263.57 billion, down 6.4 percent from the previous financial year.
It is expected that the LIOC performance is going to be better in the coming quarters due to the ongoing recovery in the economy which could demand more fuel, lubricants and bitumen.

As already seen in the March quarter, people were travelling more than both the previous year and the previous quarter as people think the future of the economy is going to be better.
Sri Lanka’s economy turned around pretty fast as foreign currency flows which became weaker during the two years of the pandemic and the following year of the social and political instability have now recovered to their pre-pandemic levels while the exports remain resilient.

Both remittances and tourism now generate roughly US$ 825 million a month while the other services inflows bring that up to well over a billion dollars for a month, providing the country the pre-crisis and pre-pandemic heft.
However, the geo-political tensions, specially the recent escalation in the Middle East are adding to the worries, specially on the energy front as Sri Lanka remains a net energy importer.

Despite rising briefly atop US$ 90 a barrel on Friday after Israel’s retaliatory strike against Iran on Thursday night, the front month Brent future’s price for crude settled at US$ 87.38 reflecting that the tensions would subside at least for now.
Indian Oil Corporation Limited has 75.12 percent stake in LIOC.