Subdued 3Q25 for LIOC on lower fuel prices

Lanka IOC (LIOC) reported a revenue of Rs.62.46 billion for the September-December quarter (3Q25), which showed a 13 percent decline from the same period in 2023. 

The topline dip comes amid the rising mobility, where the demand for fuel at the pump and elsewhere has reached almost normal levels. This is as recovery is seen with economic normalcy being restored after nearly three years of hardship. 

The revenue drop is seen due to the repeated cuts to the price at the pump as the global fuel prices mostly eased, making possible for the government to pass down the lower prices via the fuel pricing formula, which has been in place from the middle of 2022. 

Despite some recent increase seen in the global oil prices, due to the new sanctions against Russia, the price has settled lower again in response to both the ceasefire agreement now in place between Israel and Hamas and also the new Trump administration in the United States, which has promised lower fuel prices. 

Sri Lanka’s second largest downstream operator in the fuel market reported an operating profit of Rs.1.55 billion for the December 2024 quarter, down 32 percent from the same period in 2023.

Although the downstream operators are free to set their own prices in line with the formula in place, LIOC and other entities follow the prices set by the government-owned market leader, Ceylon Petroleum Corporation, at their monthly price revision, which goes into effect from the first day of every month. 

The company meanwhile reported an earning of Rs.3.98 a share or Rs.2.12 billion for the three months, compared to Rs.5.66 a share or Rs.3.02 billion reported in the year earlier, which translated into a 30 percent decline. 

The company’s share ended Rs.2.50 or 1.93 percent, down at Rs.127.25, at yesterday’s close. 

For the nine months through December 2024, the company reported earnings of Rs.15.82 a share or Rs.8.42 billion, compared to Rs.19.76 a share or Rs.10.52 billion in the corresponding period in 2023.