LIOC continues with robust performance in 2Q

• Pre-tax profit swells over 46 fold in 2Q to Rs. 14.5 b; turnover up 327% Y-o-Y to Rs. 88 b

LIOC Managing Director Manoj Gupta

While the business environment remains challenging with tough economic decisions being the need of the hour, Lanka IOC Plc (LIOC) said it remains resilient in its approach, continuously striving to steer through the adversities and difficulties due to spiralling inflation, dearth of foreign exchange, high volatility in international oil prices and fears of global recession.

Despite the above constraints, LIOC continued to build further on its exceptional results during Q1 22-23, and registered another strong performance for the Q2 22-23 with emphatic increase in revenue by nearly 327% Y-o-Y from Rs. 20.61 billion to Rs. 87.96 billion for the quarter, mainly in view of the fact that international oil prices continue to remain high. 

With more confidence being placed by the stakeholders in the company, the sales volume also increased to 160,468 MT from 128,807 MT depicting Y-o-Y volume increase of nearly 25%. The Net Profit after Tax at Rs. 12.36 billion and the Earnings per share of the Company increased to Rs. 23.21 during Q2 22-23 as against Rs. 0.53 in same period of previous year, reflect the relentless efforts to maximise return for stakeholders. 

However, with extremely high borrowing costs and unprecedented LC confirmation costs due to significant country risk perceived by banking institutions, the finance costs during the quarter were nearly Rs. 877 million as against Rs. 318 million Y-o-Y, significantly affecting Q2 performance.  

Pre-tax profit amounted to Rs. 14.54 billion, up from Rs. 313.2 million and after tax profit was Rs. 12.3 billion as against Rs. 281.5 million in the 2Q of FY22. LIOC paid Rs. 2.19 billion in income tax in comparison to Rs. 31.6 million. 

Describing the performance LIOC Managing Director Manoj Gupta said: “The Company continues its fullest endeavour towards maximising value creation for its stakeholders and returning back to the society, relentlessly pursuing an uninterrupted service to the nation while steering through adversities and striving to live up to the expectations. We assure we shall settle with nothing less.”

The company has been regularly undertaking several CSR activities supporting the livelihood of the needy families, students, hospitals and other sections of the community and recently made a contribution of Rs. 200 million to the President’s Fund meant for advancement of education, upliftment of the society or any other purpose in the interest of the public.

Gupta further mentioned that all the business verticals of LIOC are striving with their fullest of efforts to keep the momentum going and steering past the challenges may it be Auto-Fuel, Bunkering, Lubricants, Bitumen and Petrochemicals, though the situation has become extremely challenging for all the verticals. 

The periodical revision in Retail Prices (RSP) of auto-fuel in line with the common pricing formula has been beneficial for the company as well as the public at large in view of recent RSP reductions which LIOC has also implemented in line with CPC prices. 

However, the significant volatility in the international oil prices has become extremely concerning with fluctuations of nearly $ 6-8 /barrel in a day becoming frequent, which adversely affects the decision making process.

 The company has also been granted approval for opening up of 50 new retail sheds. Considering the earlier approval of 46 new sheds already with the company, LIOC is in the process of finalising the processing of application for opening up of the intended sheds across the length and breadth of the Island Nation in next few months which shall further strengthen its national presence and allow a greater role in meeting country’s energy requirements.

Despite the innumerable constraints, LIOC’s performance has been superlative with strong financials, inspiring leadership, robust fundamentals with focus on sustainability and unparalleled efforts in meeting the energy needs of the country seamlessly, as it stands committed to its nearly 13000 shareholders along with other stakeholders, to maximise their returns.