Chevron Lubricant Lanka 2Q earnings down as topline contracts

Chevron Lubricant Lanka PLC, the market leader in Sri Lanka’s lubricant market, saw its earnings declining in the three months to June 20, 2023 (2Q23) amid contraction in the top line and margin deterioration.
The company reported earnings of Rs.3.31 per share or Rs.794.4 million for 2Q23, compared to earnings of Rs.3.50 per share or Rs.839.9 million reported for the corresponding quarter of the previous year.

Revenue for the quarter under review fell 14 percent year-on-year (YoY) to Rs.5.3 billion while cost of sales rose 13 percent YoY to Rs.3.7 billion, resulting in a gross profit of Rs.1.6 billion, down 44 percent YoY.
The operating profit of the company fell 53 percent YoY to Rs.1 billion on higher distribution and administration expenses.
Company’s finance cost for the period under review fell sharply amid rupee appreciation against the US dollar.

The company’s income tax expense for the period was Rs.347.2 million, up 86 percent YoY as a result of higher tax rates that came into effect.
The company declared its first interim dividend of Rs.2 per share to be paid on August 29, 2023.
Chevron Ceylon Limited owns 51 percent of Chevron Lubricant Lanka PLC. Asia Frontier Equity Fund entered the top 20 shareholders of Chevron Lubricant Lanka during 2Q23 with a 0.39 percent stake.