Chevron Lubricants Lanka (CLL)surpassed the Rs. 3 billion mark to post its best-ever financial performance beating previous year's achievement of net earnings Rs 2.7 billion .
However Chevron Lanka Chief Executive Officer Kishu Gomes said they have concerns about the 2016 budget proposals in respect of the lubricant industry.
Commenting in their annual review he states that the government's proposal to open the lubricant market and remove lubricants from the BOI negative list will affect all existing players."
"Market may be at risk of further fragmentation with 13 players and possibly more competing for a share of the 54mn liter market in a backdrop of sluggish industry growth." In 2015, the company recorded a drop in institutional sales from the power generation sector as the source of energy mix to the national grid varied with less lubricant intensive coal power and hydro power as opposed to lubricant intensive thermal power. The construction industry, another key source of revenue for the company, also received a setback due to the phasing out of many large scale public infrastructure projects pending reassessment.
The company was able to aggressively drive growth in the export markets of Bangladesh and the Maldives, especially in the power generation sector. CLL replicated some of their local promotional campaigns in Bangladesh while competitive pricing also helped us grow volumes. The volumes from Maldives too witnessed sizeable growth and over the year we further strengthened our customer base in the island.
The gross profit margin augmented to 45% from 40% in 2014 stemming from focused pricing strategies vis-à-vis value-selling, leveraging on strong brand equity, whilst capitalizing on softening base oil prices which partly trended with global crude oil prices .
Operating profit grew by 16% 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 mn in 2015 from Rs. 3,700 mn in 2014.
However Chevron Lanka Chief Executive Officer Kishu Gomes said they have concerns about the 2016 budget proposals in respect of the lubricant industry.
Commenting in their annual review he states that the government's proposal to open the lubricant market and remove lubricants from the BOI negative list will affect all existing players."
"Market may be at risk of further fragmentation with 13 players and possibly more competing for a share of the 54mn liter market in a backdrop of sluggish industry growth." In 2015, the company recorded a drop in institutional sales from the power generation sector as the source of energy mix to the national grid varied with less lubricant intensive coal power and hydro power as opposed to lubricant intensive thermal power. The construction industry, another key source of revenue for the company, also received a setback due to the phasing out of many large scale public infrastructure projects pending reassessment.
The company was able to aggressively drive growth in the export markets of Bangladesh and the Maldives, especially in the power generation sector. CLL replicated some of their local promotional campaigns in Bangladesh while competitive pricing also helped us grow volumes. The volumes from Maldives too witnessed sizeable growth and over the year we further strengthened our customer base in the island.
The gross profit margin augmented to 45% from 40% in 2014 stemming from focused pricing strategies vis-à-vis value-selling, leveraging on strong brand equity, whilst capitalizing on softening base oil prices which partly trended with global crude oil prices .
Operating profit grew by 16% 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 mn in 2015 from Rs. 3,700 mn in 2014.
www.dailynews.lk
No comments:
Post a Comment