Chevron Lubricants Lanka earnings up in 3Q amid strong lube sales

Chevron Lubricants Lanka PLC reported strong sales growth during the three months to September (3Q21), which propelled the firm’s earnings for the period, as it benefitted from the faster rebound in the mobility and other economic activities since June.

Sri Lanka’s market leader in lubricant blending and sales reported revenues of Rs.5.19 billion for the quarter under review, logging a robust 44 percent growth over the same period last year. 

The September performance is also the highest for any quarter so far by the company known for its namesake lubricants and others marketed under the Caltex and Texaco brands. 

The company enjoys a market share of over 40 percent in the Sri Lankan lubricant market. 

However, the company saw its cost of sales rising by a faster 62 percent, reflecting the global energy price boom set forth since the beginning of the year and intensified recently as the demand soared when the major economies in the world started opening up after months-long virus-related restrictions. 

US-based Chevron Corp. reported US $ 6 billion in net income for the quarter, its best quarter since 2013 and generated US $ 6.7 billion worth of free cash flow, its highest ever, as the company expects to return part of the cash to the shareholders, as a way of a share buyback, while other big energy producers such as Exxon Mobil Corp. is also following suit. 

Its local unit Chevron Lubricants Lanka PLC reported earnings of Rs.1.02 billion for the July-September quarter or Rs.4.25 a share, compared to earnings of Rs.3.35 a share or Rs.802.88 million in the corresponding period in 2020. 

For the nine months ended in September, the company reported earnings of Rs.3.02 billion or Rs.12.58 a share, on revenues of Rs.12.31 billion, up 73 percent and 37 percent, respectively from the same period last year. 
In the nine months, the company paid Rs.2.16 billion as dividends to its shareholders. The company’s share ended at Rs.114 on Friday, after adding Rs.4.00 or 3.64 percent.

By September 30, 2021, Chevron Corp. via Chevron Ceylon Limited owned a 51 percent stake in Chevron Lubricants Lanka PLC.