Chevron Lubricants Lanka 1Q earnings expand 20% YoY

Chevron Lubricants Lanka PLC, the country’s lubricant market leader in terms of market share, saw its earnings for the first quarter (1Q24) ended on March 31, 2024 expand with higher revenues.
The company reported earnings of Rs.5.84 per share or Rs.1.4 billion for the quarter under review, compared to Rs.4.86 per share or Rs.1.16 billion reported for the corresponding period of last year.
The company’s revenue for the quarter expanded by 13 percent year-on-year (YoY) to Rs.7.06 billion, from Rs.6.2 billion in 1Q23. The cost of sales rose 7 percent YoY to Rs.4.4 billion.
The operating profit for the period grew 30 percent YoY to Rs.1.88 billion. 
While the finance income dipped 44 percent YoY and the finance cost grew by 4 percent, the company recorded a profit before tax of Rs.2 billion, a 20 percent YoY growth.
Chevron Lubricants Lanka PLC ended 2023 earning a profit after tax of Rs.3.6 billion, a 1.7 percent decline, compared to Rs.3.6 billion recorded in 2022. The earnings per share dropped marginally to Rs.15.01, compared to Rs.15.28 in the previous year.  The company in its latest annual report said it remains cautiously optimistic on the outlook for 2024, since it observes signs of demand recovery in certain segments but not in others. 

“While there are several positives in the environment compared to the situation in 2022, with 2024 being an election year, it is fraught with uncertainty,” the company said.
According to the statistics by the Public Utilities Commission of Sri Lanka, the local lubricant industry declined 36 percent in the first half of 2023 versus the same period in the prior year. 
This was on top of a 26 percent decline in full-year 2022 volumes over full-year 2021. 
Vehicle running continued to be depressed with the fuel quota in operation, which led to reduced consumption of lubricants, with the pinch being felt by vehicle service stations and lubricant sales outlets. 
Chevron Ceylon Limited owns 51 percent of the issued shares of Chevron Lubricants Lanka PLC.