Amidst challenges LIOC steers through Q1 2022-23 with great support to industries

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Notwithstanding the current economic challenges, LIOC’s performance during the Q1 22-23 has been remarkable with increase in revenue by nearly 196% Y-o-Y from LKR 16.86 Bn to LKR 49.93 Bn mainly on account of high cost of product, in view of steep rise in international oil prices.

 The sales volume of the company also increased to 139,762 MT from 135,354 MT on Y-o-Y basis. With Net Profit after Tax at LKR 9.93B, the Earnings per share of the Company increased to LKR 18.64 in Q1 22-23 as against LKR 0.51 in Q1 previous year reflecting Q1’s robust performance. However, the incessant devaluation of currency from LKR 299 to LKR 367 per US$ coupled with extremely high borrowing costs, raising the finance expenses during the quarter to LKR 1792 Mn as against LKR 123 Mn Y-o-Y, significantly affected Q1’s performance and remains an area of concern, being uncontrollable. 

Describing the robust performance, Manoj Gupta, MD LIOC said “The Company ventured into new line of business of selling diesel directly to export houses, tourism services providers registered under Sri Lanka Tourism Development Authority, licensed telecommunication service providers and Power Generation Companies, against remittance  in US dollars. The collection in US$ eliminated the exchange rate risk and allowed sale of fuel to industries at a predetermined price. On the other hand, it met the essential fuel requirement of innumerable industries which are responsible for livelihoods of millions of employees & their dependent family members. It is beyond imagination to believe the repercussion in case fuel requirements were not met on time.

I am so indebted to my workforce at Trincomalee Terminal who have had round the clock operation of the terminal for more than 3 weeks with limited resources to supply fuel not only to industries but also to ensure supply of 7500 MT of diesel to CPC for onward dispatches for essential services. Company’s Bunkering business has registered strong exceptional performance, the main contributor has been the exchange gain in view of depreciation of currency, as the sales take place in US$. The revision in Retail Prices (RSP) for auto-fuel in line with the pricing formula has been beneficial for the company.

RSP revisions played a crucial role in circumventing the price volatility in the international oil market to a large extent. The bottom-line of the company has also been transformed by exceptional performances by Lubricants, Petrochemicals and Bitumen. We are extremely grateful to CBSL authorities and Ministry of Power and Energy, GoSL for their continuous support”