Lanka IOC posts Rs. 490m 1Q profits

Hiran H.Senewiratne

Lanka IOC Limited is to consolidate future expansion programmes with the posting of excellent first quarter net profits of Rs. 490.11 million.

This is in sharp contrast to a Rs. 584.42 million loss a year ago, citing the lifting of state price controls, its Managing Director K Ramakrishnan told the Daily News.

They are looking for expansion in their operations in every business due to the company's excellent performance, Ramakrishanan said.

Lanka IOC, the local unit of India's IOC posted a Rs. 685.74 million loss for the financial year ended March 31, 2007 after the Government repaid a Rs. 1.72 billion subsidy.

"The normalisation of prices was the major factor, as well as the end of the subsidy," said Ramakrishnan, citing the start of free market fuel pricing.

Turnover during the quarter rose to Rs. 9.71 billion from Rs. 8.93 billion during the same period last year.

Earnings per share were Rs. 0.92 for the quarter, compared with a loss of Rs. 1.01 a share a year ago.

Lanka IOC in January received oil bonds worth Rs. 4.46 billion from the Government in lieu of an unpaid subsidy for keeping prices artificially low at the pumps.

Lanka IOC suffered a revenue loss of Rs. 2.25 billion between January 2004 and June 2006 as it sold oil products at rates fixed by the Government. Price controls were lifted in July 2006.

Lanka IOC, a subsidiary of Indian Oil Corporation has been incorporated to carry out retail marketing of petroleum products, bulk supply to industrial consumers building and operating storage facilities at the Trincomalee Tank farm.

LIOC holds one third share in the Common User Facility in Sri Lanka.