Laugfs Gas 3Q deep in red amid loss of sales

Laugfs Gas PLC lost nearly a billion rupees in the three months to December 31, 2021, the third such quarter, as the company continued to be hammered first by the suspension of supplies, due to the price controls and then due to the disruptions caused by the foreign currency troubles and concerns over gas explosions.
The company reported a net loss of Rs.980.6 million for the October-December period (3Q22), compared to a profit of Rs.151.5 million in the corresponding period in 2020. The sales for the period stood at Rs.7.9 billion, down 25 percent, from Rs.10.5 billion in the year earlier period. 
The twice-raised retail prices didn’t help the company to change its fortunes, as loss of sales and the higher global gas prices were more pronounced. 
The price controls, foreign exchange troubles and incidents of gas explosions disrupted the supply of household gas since July last year, causing massive hardships for millions 
of households.
While the situation is improving slowly, with the normalising supplies, there are still shortages in certain localities perhaps due to the delays in supply chains. 
The company is among several other private sector entities whose financial fate is in the hands of the government, as the household gas prices are administered in Sri Lanka. 

No amount of evidence of how futile the price controls are and the amount of mess it creates in the markets hasn’t deterred successive governments in introducing price controls, disrupting market forces to operate efficiently, which will ensure uninterrupted supplies and functioning of private sector entities.  
In the nine months to December 31, 2021, Laugfs Gas reported a loss of Rs.2.8 billion or Rs.7.33 a share, compared to a profit of Rs.285.7 million or 74 cents a share in the corresponding period in 2020. 
The nine-month sales rose by 14 percent to Rs.28.7 billion.
Repeated quarterly losses turned the company’s net book value to a negative Rs.2.28 billion by the end of December 31, 2021. 
The Employees’ Provident Fund holds a 17.28 stake in the company’s voting shares, being its second largest shareholder while it held a 34.69 percent stake in the company’s non-voting shares, being its largest shareholder.