Wednesday, February 17, 2010


Feb 17, 2010 (LBO) – The Sri Lanka unit of Indian Oil Corporation said it made a ‘nominal’ profit in the December quarter compared with a loss a year ago on higher petrol prices and other products like marine fuel and lubricants.
Lanka IOC said in a stock exchange filing that net profit for the December quarter was 12 million rupees compared with a loss of 770 million a year ago.

Turnover in the December quarter rose 1.5 percent to 13 billion rupees from a year ago with sales of petrol and diesel down but marine fuel sales up sharply.

Other operating income doubled to 264 million rupees mainly because of a dividend from Ceylon Petroleum Storage Terminals Limited, a common user storage facility partly owned by LIOC.

The dividend shot up 300 percent to 225 million in the December 2009 quarter from 56 million the year before.

LIOC managing director K R Suresh Kumar said he expects the company to do better in the next quarter.

“It was a nominal profit. During the December quarter our selling prices had been slightly better. Earnings from lubricants and bunkers (marine fuel) also helped.”

Sales of petrol and diesel fell in the quarter as supplies were disrupted by labour union action at the state-owned oil refiner, Ceylon Petroleum Corp., while marine fuel sales increased sharply.

Government-mandated retail petrol prices were cut by 15 rupees a litre on December 29.

Suresh Kumar said he expects the next quarter to be better with the government having removed a customs duty charged on LIOC along with the cut in petrol prices.

“The reduction in selling price has been matched by the duty being taken off. From this quarter onwards things will be better as there is a general improvement in the economic climate which should help volumes to grow.”

The island’s 30-year ethnic war ended last May, resulting in a revival in economic activity.

LIOC made a loss of 203 million rupees in the September 2009 quarter, after making a 110 million profit a year ago.

It made a 856.7 million rupee loss in the June quarter compared with a profit of 1.0 billion rupees a year earlier, as it was squeezed between high taxes and government mandated prices.

Suresh Kumar said sales of ship fuel in Colombo port were doing “reasonably alright” with total market volumes having stabilized at around 30,000 tonnes after rising during the year.

LIOC has captured a 35-percent market share, he said.

“I expect with things improving volumes to go up further. The market is extremely competitive but reasonably profitable.”

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