Wednesday Nov 13, 2024
Wednesday Nov 13, 2024
Tuesday, 12 October 2021 02:26 - - {{hitsCtrl.values.hits}}
LAUGFS Gas PLC said yesterday it looked forward to returning to profitability after years of losses following the Government nod for automatic price revision on LPG.
The Government by way of an Extra Ordinary Gazette Notification No. 2248/65 dated 8 October 2021 withdrew the Gazette notification of 1302/24 dated 20 August 2003 prescribing LP gas as one of the ‘Specified Goods’, wherein the sanction of the Consumer Affairs Authority was required to make any consumer price revisions.
“This resulted in the consumer prices of LP Gas hereinafter being determined only by market forces and free of any regulatory control by the authorities concerned,” LAUGFS said.
“The company has incurred continued losses all these years, due to the imposition of regulatory controls over the LP gas consumer prices. The company is of the opinion that profitability can be maintained in the future, since it is free to adjust the consumer prices of LP gas in relation to the actual costs to be incurred,” LAUGFS said in a filing to the Colombo Stock Exchange.
It thanked shareholders as well as all the other stakeholders for the understanding they had and the confidence placed in the affairs of the company.
For the quarter ended 30 June 2021, LAUGFS› energy business suffered a loss of Rs. 648.5 million as against a loss of Rs. 145 million a year ago. Revenue rose from Rs. 5 billion to Rs. 5.5 billion whilst LAUGFS suffered an operating loss of Rs. 422 million in 1Q as opposed to a profit of Rs. 281.7 million.
LAUGFS also had Rs. 348.4 million in finance cost, though lower from Rs. 492 million in 1Q of FY21. Net loss from energy business was Rs. 539 million, up from Rs. 183 million. IN FY21, energy segment revenue dropped to Rs. 22 billion from Rs. 25.6 billion. Operating loss was Rs. 79 million as against a profit of Rs. 1 billion. Pre-tax loss was Rs. 1.68 billion, up from Rs. 846 million loss in FY20.
In its price revision, LAUGFS said within the Colombo District its 12.5 LPG cylinder would cost Rs. 2,840, up by Rs. 984. The five kg cylinder has been increased by Rs. 393 to Rs. 1,136. LAUGFS last month got Consumer Affairs Authority (CAA) approval to hike prices though below its desired level and remained more expensive than Litro.
Both Litro and LAUGFS had been clamouring for a fair hike given spikes in global markets. Litro said the global price of LP gas increased to an unprecedented amount of $ 800 per ton on 1 October.
The decision to not increase gas prices parallel to cost fluctuations during the past nine months resulted in a loss of Rs. 10.5 billion for Litro Gas Lanka, sources added.
