LIOC turnover tops Rs 51.74 b

Growth in bunker fuel, lubricants and bitumen sales:

Sanjeevi JAYASURIYA

Lanka IOC PLC recorded a sales turnover of Rs 51.74 billion in the financial year 2010 and 2011 compared to Rs 50.21 billion in the previous year.

The company also registered a significant growth in the sale of bunker fuel, lubricants and bitumen.

The strong growth in the economy of Sri Lanka during the year has played a significant role in the physical and financial performance of the company. The improved performance is due to margins realized in our other activities of lubricant, bitumen and bunker fuel, Lanka Indian Oil Company (Lanka IOC) Managing Director K R Suresh Kumar told Daily News Business.

“We have not been able to perform well in our co-business of marketing petrol and diesel through retail centres. We expect to improve margins on retail market in the current year and to realize better margins,” he said.

The company recorded post-tax profit of Rs 876.5 million compared to a loss of Rs 422.7 million the previous year. While the company could realize positive margins on petrol, lubricants, bitumen the margins on the sale of diesel was negative.

The positive margins earned from those segments helped to offset the losses suffered in diesel. However the volatility in the prices of petroleum products in the international market and inability to revise the selling price in the domestic market affected the performance of the company in the last quarter of the year.

The company was compelled to revise the domestic selling prices of diesel upward by Rs 5 per litre in the month of February 2011.

The company also focused on niche products like Xtrapremium Petrol, Xtramile Diesel and Xtrapremium 95 Octane and other value-added facilities at petrol sheds. The customer response to these products has been over-whelming and has helped to extend the reach of these products to more petrol sheds in the network.

More Servo Xpress service centres were also set up in selected petrol sheds to provide world class vehicle servicing facility. The company also commissioned the first grassroots petrol shed in November last year at Marawila and has set up two more petrol sheds this year.

The company aims to expand the network to other areas in the country which are not served at present.

The response from customers to these new petrol sheds is encouraging and setting up more sheds will benefit the company. The company has also improved its operations efficiency at the storage terminal and the lube blending plant at Trincomalee.

“Special focus was given to export of lubricants under TIEP Scheme. Export of lubricants which touched a record 415,000 liters during the year. Exports were made to countries such as Nepal, Mauritius and Ghana,” he said.