Chevron Lubricants posts Rs. 3 b PAT

Chevron Lubricant Lanka PLC recorded a top-line of Rs. 11.6 billion during period under review compared to Rs. 11.5 billion posted in 2014.

However, the company grew volumes in the domestic market driven by the retail sales segment which was noteworthy given the industry growth of one percent and the decline of five percent in 2014 and 2013. The overall domestic volumes grew three percent compared to 2014. The favourable movement in base oil prices allowed the company to adroitly maneuver its trade schemes and promotional campaigns to incentives customers and consumers and thereby grow volumes.

The growth in volumes was augmented by performance in export markets Bangladesh and the Maldives through higher retail penetration and acquisition of new products by distributors.

Exports to Bangladesh were consistent resulting in a 13 percent year-on-year volume growth while exports volumes from the Maldives grew by 13 percent. However, volumes from marine lubricant sales and exports to related companies declined by 15 percent year-on-year. Total export revenue grew by three percent in 2015 to reach Rs. 895 million.

The company recorded a profit after tax of Rs.3,092 million compared to Rs. 2,747 million in 2014 which translated to growth of 13 percent year-on-year.

The gross profit margin augmented to 45 percent from 40 percent in 2014 stemming from focused pricing strategy vis-a-vis value selling, leveraging from strong brand equity while capitalising on softening oil prices which partly trended with global crude oil prices.

The operating profit grew by 16 percent in 2015 primarily due to the robust gross margin performance, despite an increase in operational expenditure and a decline in other income compared to 2014.

Profit before tax increased to Rs. 4,319 million in 2015 to Rs. 3,700 million in 2014.

Net finance income increased by 36 percent to Rs. 175 million as cash reserves strengthened during the year owing to less capital expenditure commitments while the yield on short term investments remained relatively stable. The total comprehensive income for the year was Rs. 3,095 million which included a net of other comprehensive income after tax of Rs. 3 million pertaining to an actuarial gain on retirement benefit obligation.

Managing Director, Chevron Lubricants, Kishu Gomes said, "Apart from financial results, we are equally proud of our 14 year safety record, which underscores our commitment to world-class safety and operational excellence."

Brand repositioning, focused communication, superior product technology, greater market penetration and promotions and educating customers are key areas the company will focus on in the year ahead.