Chevron’s Lankan unit December quarter net down 21%

Chevron Lubricants (Lanka) PLC, the leader in Sri Lanka’s lubricant market, saw its December quarter (4Q17) earnings narrowing 21 percent t year-on-year (YoY) to Rs.549.2 million, the interim financial accounts released to the Colombo Stock Exchange showed yesterday.

The earnings per share (EPS) fell to Rs.2.29 from Rs.2.88. This was the fifth consecutive quarter the local unit of the multinational oil player reported depressed profits amid intense price competition in the market by relatively late entrants, who are eating up Chevron Lanka’s market share.

The revenue from lubricant sales for the quarter fell 5 percent YoY to Rs.2.8 billion, possibly indicating lower volumes. The cost of sales for the period remained flat though gross profit fell 12 percent YoY Rs.1.12 billion.

Despite the company managing to cut its administrative expenses by 17 percent YoY to Rs.179.2 million, the operating profit fell 16 percent YoY to Rs.737 million.

Meanwhile, for the year ended December 31, 2017, the company reported earnings of Rs.2.55 billion, down 27 percent YoY. The top line fell almost a billion rupees or 9 percent YoY to Rs.11.05 billion. The company has declared three interim dividends in 2017, totalling to Rs.10. Chevron Lanka opened a state-of-the art lube blending plant in December, 2014. The company last August exported its first consignment of Havoline engine oil to Pakistan eyeing for greater economies of scale. 
The company also exports its products to Maldives.

Chevron Ceylon Limited owns 51 percent of the shares in the firm, with the rest of the shares distributed widely among minority shareholders.