LAUGFS Gas holds AGM

Monday, 8 July 2013 00:06 - - {{hitsCtrl.values.hits}}

LAUGFS Gas PLC held its Annual General Meeting on 29 June 2013 at the Empire Ball Room of Mount Lavinia Hotel. Laugfs Gas PLC and its subsidiaries in a Stock Exchange filing of the un-audited financial statements for the fourth quarter ended 31 March 2013 had indicated record performance with Group revenue for the year under review crossing the Rs. 10 billion mark to reach Rs. 10.6 billion. It is a landmark for the Group of companies in its comparatively short history of business operations. It has achieved this feat despite the many unprecedented changes that has taken place, over one and a half decades of its existence, in virtually all aspects of the business environment in which it was operating. The Group was able to withstand the turbulent times and preserved core of the business, by staying focused on the fundamentals of the operation, while being willing to change everything else necessary to win and retain customers.

The profit before tax of the Group recorded Rs. 1.3 billion, which is a remarkable growth of 29% over the previous financial year. The group total comprehensive income for the year, net of tax recorded a commendable Rs. 1.0 billion as against Rs. 597 million last year, which is a creditable improvement. The total group assets increased by 3% to a position of Rs. 10.6 billion. The property, plant and equipment alone increased to Rs. 6.5 billion, net of depreciation is an increase of 18% over the previous year. The productive investments made in this manner would accrue benefits to the shareholders in the ensuing years in the form of better returns having comparatively shorter gestation periods and early pay backs. Group retained earnings increased by 16% to Rs. 3.5 billion, while net assets increased by 8% to Rs.6.5 billion. The net asset value per share has increased to Rs. 16.76 from Rs. 15.58 last year. Earnings Per Share (EPS) increased by 28% from Rs. 2.14 to Rs. 2.74 per share. The Group is determined to keep this momentum uninterrupted to maximise the value of the shareholders’ investments in the future as well. The core business activity of the Group, the downstream operations of LP Gas, once again recorded highest-ever revenue of Rs.9.7 billion, and it was an increase of 16% over the preceding year. The gross profit margin, however, reduced to 11% from the previous year’s 14%, mainly due to escalation of world market prices of LP gas and also it was due to the impact of upward movement of foreign exchange rates prevailed during the greater part of the financial year under review. The company’s EBITDA surged to Rs. 1.6 billion, which is an increase of 62% over last year and a creditable achievement in the wake of uncertainties and slowdown of economic activities that were faced with. The profit before tax of the company from continuing operations was Rs. 1.4 billion, an increase of 72% over the previous year. The most striking and commendable achievement on the core business activity is that it has more than doubled the total comprehensive income net of tax to Rs. 1.2 billion during the year under review from Rs. 411 million recorded last year. The company’s total liabilities reduced by 4% during the year to Rs. 3.9 billion. The company’s retained earnings had a notable surge of 27% from Rs. 2.3 billion last year to Rs. 3 billion in the current year. The array of achievements described both for the Group and for the company in its core business activity, converged to underscore the strength of a financially healthy organization that always meets its growth targets and maintains uninterrupted momentum, despite uncertain external environment forces that usually prevails. Despite all these impressive achievement the Group believes the best and most exiting days for LAUGFS Gas remain ahead. The Board of Directors having considered the financial performance, decided to declare first and final dividend of Rs. 1.50 per share for the financial year ended 31 March 2013. This is the third consecutive time the company declared dividends after its historic IPO in December 2010. The LP gas industry globally is in the midst of a profound structural change as new sources of supply compete for market share, and as a cleaner source of energy take a greater share of primary energy consumption. The industry globally can take heart that consumption so far has managed to keep pace with this production surge, despite uncertainty of the global economic slowdown. With LP gas demand and supply equilibrium maintain at optimum levels world market price stability is ensured at least in the short to medium term. The LP gas industry locally has an immense potential as a cleaner source of energy, and also since the penetration levels are comparatively very low, as against some of the Asian countries. There is a significant imbalance in energy usage, which has to be adjusted with cleaner and more economic sources of energy like LP Gas in our country. However, the key challenges facing the LP gas industry in the country in the ensuing years will be succeeding and educating the authorities and decision makers concerned regarding the use of LP gas. In order to do so, the stakeholders involved are in need of effective, consistent communication using rigorous evidence based on data and analysis. Therefore, it is imperative that the industry must speak with strong, unified voice to persuade the authorities, other stakeholders and financial markets to support the use of LP gas where appropriate.