Lanka IOC registers superlative performance despite challenging FY23

• Revenue up 213% to Rs. 282 b; Net profit soars to Rs. 37.6 b from Rs. 4.8 b in FY22
• Says periodical fuel price revision has been beneficial to people but points to significant volatility in international oil prices due to geo-political factors as cause for concern

Lanka IOC Plc (LIOC) said yesterday it posted a robust performance with resilient approach throughout FY23 continuously striving to steer through the adversities and stiff challenges confronted due to dearth of foreign exchange, spiraling inflation, high volatility in international oil prices and country ratings down-gradation, to name a few. 

While the economic conditions remained seemingly uncontrollable, LIOC said it registered a remarkable performance by circumventing the constraints and ensuring uninterrupted fuel supplies for the country.

Despite numerous challenges, LIOC continued with exemplary performance throughout the year with a remarkable increase in revenue by nearly 213% Y-o-Y from Rs. 90 billion to Rs. 282 billion, mainly in view of the high international oil prices as compared to the last year. 

With enhanced consumer confidence, the Sales volume during the quarter increased from 512,831 MT to 589,144 MT with YoY volume posting an increase of nearly 15%, restricted by QR code quotas. 

LIOC posted Net Profit after Tax of Rs. 37.69 billion in FY23 from Rs. 4.8 billion. The Earnings per share of the Company also increased from Rs. 9.05 in FY22 to Rs. 70.79 in FY23 reflecting LIOC’s relentless pursuit 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 year were nearly Rs. 992 million as against Rs. 50 million, significantly affecting the year’s financial performance. The introduction of Social Security Contribution Levy w.e.f 1 October 22, also led to an additional outgo of Rs. 1.46 billion.

Describing the financial year’s performance, LIOC’s new Managing Director Dipak Das said: “With our strong commitment to ensure regular and uninterrupted fuel supplies to the nation we have strived hard throughout the year towards maxmising value creation for our stakeholders & at the same time returning back to the society. We reiterate our resolve to continue efforts to not only live up to the expectations but go beyond. We are glad to share that LIOC has enhanced its footprints in the country with commissioning of 37 new sheds taking the total number of sheds to 250. We promise to enhance our role in the energy security of the country in all possible dimensions in the coming months.”

With LIOC expanding its footprint in the country, they are focusing on further strengthening their presence to play a national role in meeting the country’s energy requirements.

Das further stated that while all the business verticals of LIOC remain committed to contribute, Bunkering and Lubricants faced stiff competition mainly due to demand uncertainties in view of economic slowdown, devaluation in local currency and sharp fluctuations in the international oil prices for which the company is leaving no stone unturned in taking appropriate measures, in their efforts to close the financial year with an unprecedented financial and operational performance. 

The periodical revision in Retail Prices (RSP) of auto-fuel in line with the common pricing formula has been beneficial for the people 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 due to geo-political factors continues to remain a cause of concern.

Despite the constraints, LIOC said its performance has been praiseworthy with sharp focus on growth and sustainability powered by an inspiring leadership and strong fundamentals for meeting the energy needs of the country uninterruptedly with a commitment to maximise returns to its over 14,000 shareholders, along with other stakeholders. 

LIOC also continued to demonstrate its commitment of giving back to society by putting words into action by engaging into regular CSR initiatives including donation of Rs. 200 million to the President’s Fund, donating for a worthy cause of upliftment of Elder’s Home that house several elderly individuals, Signing of an agreement with MEPA, Sri Lanka for taking up cleanliness of two beaches at Dehiwala and Modera for a period of one year to support clean seas campaign by reducing marine pollution, etc. In addition, LIOC has regularly contributed to government hospitals by donating essential medicines for the help of needy patients.