Extracted from Daily News

Lanka IOC is planning on investing Rs. 400 million to add another 20 fuel stations to the current network, while also completing refurbishments of the existing fuel outlets, Lanka IOC Managing Director Subodh Dakwale said.

The company has also plans to export lubricants to test the markets of Indonesia and Malaysia.

The company’s market share of the lubricants sector will also be expanded through promotional campaigns by utilising the growing fuel station network as retail points. In this regard, extensive market surveys have already been conducted and revamped Lanka IOC lubricants will be launched in the new financial year(2015/2016). “Although I do not anticipate significant revenue contributions from market development initiatives over the short term, I believe export markets will open up new revenue opportunities over the longer term,”Dakwale said.

Lanka IOC bunkering operations are currently facing severe price competition from Indian ports that are able to offer lower prices due to domestic production of fuels, while Lanka IOC has to accommodate the additional costs related to fuel imports. However, he is hopeful that company’s technical expertise and extensive range of services will continue to provide a competitive advantage to ensure sustained revenue growth in the new financial year. (IH)

Sri Lanka will soon formulate a business plan to expedite the development of China Bay oil storage facility as a major step towards making Trincomalee a regional petroleum hub with Indian assistance, a top official revealed.

Secretary to the Ministry of Power and Energy, Dr. B.M.S Batagoda told Business Times that a ten member task force is now working out the business plan aimed at harnessing full potential of the tank farm .

He noted that Indian Prime Minister Narendra Modi during his visit to the island in March this year has pledged to help Sri Lanka to turn Trincomalee into a regional petroleum hub and the Sri Lankan government has already made preliminary arrangements towards this end. A meeting of members of the task force was held at the Ministry of Power and Energy this week to discuss matters pertaining to the business plan, he disclosed.

The Lanka Indian Oil Corporation (LIOC) and the Ceylon Petroleum Corporation (CPC) have agreed to jointly develop the Upper Tank Farm at China Bay in Trincomalee on mutually acceptable terms, he said.

These oil tanks were built by the British in 1944 but had been lying idle since the end of World War two and the then government of Prime Minister Ranil Wickremesinghe has agreed to give them to India in the early 2000s. However it was not materialised.

LIOC Managing Director Subodh Dakwale told Business Times that his company already utilizes 14 tanks in the Lower Tank Farm and it will soon take over the upper tank farm with 84 giant oil tanks

Trincomalee’s China Bay facility, leased to Lanka IOC in 2002, has a potential storage capacity of about a million tonnes, each tank having a capacity of 12,100 tonnes. Mr. Dakwale said that a feasibility study on the project should be conducted to find out as to how refurbishment will be done, how much money to be spent and what opportunities are there for us to explore, he said.

Of the original 101 tanks built by the British in the 1930s, only 99 still exist and two were destroyed during the Second World War.

He said the 84 remaining tanks in the upper farm will have to be extensively rehabilitated.

The Trincomalee oil tank farm was included in the Indo-Lanka peace accord signed in July 1987 barring other countries from taking over it.
Under the pact, the work of restoring and operating the oil tank farm should be carried out as a joint venture between India and Sri Lanka.

A function organized by the Lanka IOC in Trincomalee to mark the International Women’s Day was held at the Chaya Blue Hotel in Trincomalee last Saturday. Apart from the employees of the company, a large number of women in the area also participated in the event.

Lanka Rating Agency (LRA) has assigned Lanka IOC’s (LIOC) a long- and short-term corporate credit ratings AAA and PP1 respectively. On a stand–alone credit profile, LIOC rated at AA+ and P1 and notched up on parent support. The long-term rating carries a stable outlook.

LIOC is mainly involved in distribution off auto-fuel and also has significant presence in lubricants, bitumen and oil bunkering markets.

The ratings were upheld by the company’s notable presence in auto-fuel distribution, bitumen and lubricants markets. Sri LLankan auto fuel distribution segment is a duopoly market and LIOC is the second auto fuel distributor in Sri Lanka with a market share of 18% after the state owned Ceylon Petroleum Corporation. LIOC has significant presennce in the bitumen segment.

However, the bitumen segment became highly competitive following the licenses granted to small and medium sized players. The company’s lubricant brand SERVO has a market presence of 15.8% in lube segment and is the second largest domestic player.

– See more at: http://www.dailynews.lk/?q=business/lra-rates-lanka-ioc-aaa#sthash.WgyGCFO9.dpuf

Lanka IOC PLC recently came onboard to power the 35th National Conference of Chartered Accountants organized by the Institute of Chartered Accountants of Sri Lanka (CA Sri Lanka) with a gold sponsorship.

This is the first time Lanka IOC has extended its support to the national conference, which is one of the country’s largest corporate events, with an annual participation of over 1200 chartered accountants and business leaders. This year’s conference will revolve around the theme ‘Rethink to Revive’.

Managing Director of Lanka IOC Mr. Subodh Dakwale noted that rethinking may be linked to revive positives in efficiency, productivity, quality, competitiveness in our business process resulting in maximizing creation of wealth, value and satisfaction for all stakeholders.

“As an organization, Lanka IOC always finds innovative ways to achieve international standards of excellence in all aspects of business spectrum with a focus on our vision to become a major integrated energy company with strong environment conscience, playing a national role in energy security of the country. In the globalised environment, we need to keep evolving ourselves to remain competitive and bring customer delight through value of products and services,” he said.

Mr. Dakwale emphasized that the theme of the 35th National Conference of Chartered Accountants organized by CA Sri Lanka is very pertinent in the present world. This conference will have participation of hundreds of business leaders and professionals whose deliberation on the theme subject will certainly be very productive and helpful.

Welcoming Lanka IOC onboard, President of CA Sri Lanka, Mr. Arjuna Herath, said that it was a pleasure to have a company in the stature of Lanka IOC onboard to support the 35th National Conference of Chartered Accountants for the first time in the conference’s history.

“We are looking forward to yet another inspiring conference this year from 23rd to 25th of October 2014, which will give our chartered accountants as well as business leaders, the required leverage to help them spearhead revival by rethinking conventional business models at this year’s conference,” he added.

The Chairman of Lanka IOC Plc (LIOC), Makrand Nene says it is of great importance that the Sri Lanka Government evolves a transparent pricing system for fuels which would not only benefit the public but would also pave way for systematic infrastructure development in the energy sector. According to the LIOC management, there remains minimal correlation of local prices to International world market prices, which exposes the industry to an acute risk of incurring significant financial losses due to sudden price fluctuations. Hence, they say there is a need for greater transparency in the formulation of a method to correlate to global prices.

Addressing shareholders at the release of the company’s Annual Report for the year March 31, 2014, the LIOC Chairman Nene said that 2013/2014 had been the most successful financial year to date, as the firm continued to grow in its second decade of operations as the second and only other player in the Sri Lankan petroleum sector next to Ceylon Petroleum Corporation (CEYPETCO).

“With the Ceylon Petroleum Corporation having finally increased their diesel selling price in line with Lanka IOC in February 2013, our retail sales of diesel grew by 41% in quantity and 46% in value this financial year,” Nene announced adding that the company has achieved Rs.81.79 billion in sales, up 9% from Rs.75.11 billion recorded in the previous year.

Lanka IOC Plc has thus recorded a profit after tax of Rs.4.8 billion for the financial year, up from Rs.2.9 billion reported in the corresponding period of the previous year.
Domestic revenue for the year has increased by Rs.11.95 billion, which is a 20.9% growth from the previous year with the largest contribution from diesel sales which increased by 53%. Petrol revenue only grew by 8% but it contributed 40% of the total revenue, financials showed.

Meanwhile, Managing Director Subodh Dakwale said LIOC continued to expand its retail sector in 2013/14, opening ten new outlets in locations where fuel filling stations were most needed, increasing its number of filling stations to 147 and refurbishing a number of existing stations.
“In 2014/15, however we plan to kick start our expansion drive by opening over forty new outlets and refurbishing a further fifty. We plan to spread our footprint across the country in a major way, by increasing our presence in the unrepresented areas of the island nation,” he announced.

LIOC said in the financial year 2013/2014, fuel products had continued to be their highest profit center, garnering 75% of the total profit and accounting for 73% of the total turnover. Sales of petrol grew by 3% in 2013/14 to over 200,000 kiloliters while with price parity finally being reached, diesel sales grew by an incredible 41% to over 222,000 kiloliters.

On the corporate end, LIOC said acquisition of the business during the period under review to supply lubricant products to the Sri Lanka Transport Board can be counted upon as a major achievement.

In the year 2013, although value of total oil imported into Sri Lanka grew up to Rs.182 billion from Rs.157 billion in 2012, the value of refined products imported reduced to Rs.353 billion from Rs.467 billion. Nonetheless, the oil prices remained unchanged within the year and sales of petrol grew by 4% and diesel grew by 2%.

Business Today recognized the top corporate performers of Sri Lanka for the financial year 2013-2014 of which Lanka IOC was named among the Top 10 corporate performers for their resilience in trying circumstances and their contribution towards the economy of Sri Lanka.

The Business Today TOP TWENTY FIVE companies were selected on the basis of their financial performance during the financial year ending December 31, 2013 and March 31, 2014. It is strictly based on the published information of companies listed on the Colombo Stock Exchange. Financial criteria considered include share turnover, revenue, profit after tax, return on equity, earnings per share, market capitalization, value of shares transacted and value addition. Lanka IOC published their turn over at Rs.81.79 billion, their gross profit at a staggering Rs.8.31 billion, their profit after tax at Rs. 4,813 million and their market capitalization at Rs.20,500 million.

The Chief Guest at the occasion was Gotabaya Rajapaksa, Secretary to the Ministry of Defense and Urban Development while Chief Justice Mohan Pieris was the special guest. Mrs. Ioma Rajapaksa and Priyanthi Pieris were also present at the occasion. The event was further graced by many distinguished guests including politicians, corporate leaders, foreign dignitaries, diplomats and members of the armed forces of Sri Lanka. Mr. Rajapaksa addressed the gathering during the award ceremony. Staged performances and entertainment during the evening also shed light on the new strides and ventures of BT Options.

Since 1998, Business Today has recognized and awarded top corporate performers annually for 17 years, acknowledging their contribution to the economic development of Sri Lanka.

Lanka IOC financial report for the year 2013/2014 have been released. The report can be downloaded as a PDF from our Financial Reports section.
A web-friendly version of the report is included below:

Lanka IOC PLC saw net earnings surge 65% to Rs 4.81 billion for the year ended 31 March 2014, up from Rs 2.91 billion a year ago, financial results filed with the stock exchange showed.
 
Sales grew 8.9% to Rs 81.8 billion and gross profit grew 54.22% to Rs 8.31 billion.
Selling and distribution expenses amounted to Rs 1.74 billion, up from Rs 1.67 billion a year ago, administration expenses fell to Rs 875.3 million, down from Rs 889.1 million the previous year. Finance income grew to Rs 301 million, up from Rs 267 million a year ago and finance costs grew to Rs 258.5 million, up from Rs 138.8 million the previous year.
 
The company’s assets grew 9.24% to Rs 26.98 billion.
Export sales fell to Rs 12.84 billion during the year ended 31 March 2014, down from Rs 18.12 billion a year ago.

From the Ceylon Today.

Through an ongoing initiative in teaching English to children from under-privileged communities, Lanka IOC, Faiszer Mustapha Foundation and Cosmopolitan Learning Academy launched ‘English for Young Learners’ six month programme for 1500 students from 15 chosen Dhamma or Sunday Schools from the Colombo District under the patronage of President Mahinda Rajapaksa.

Following the success of the programme last year at Trincomalee, Minister Faiszer Mustapha, who instigated the Foundation with the sole focus of alleviating the social setback that todays’ students tend to face when learning and conversing in English.

Lanka IOC had undertaken this project as their Corporate Social Responsibility (CSR) and have realized that projects of this caliber are focused towards providing education to a child from a poor background would help in the child’s upliftment for a better future.

“Lanka IOC and the Faiszer Mustapha Foundation had been working together on bringing about this concept for Dhamma Schools in the Colombo District.

Today, with the ongoing global changes and advancements, this strategy for companies to embrace CSR is meaningful and through this concept, we will work to provide youth with the chance to be able to learn English and benefit from it,” Chairman, Faiszer Mustapha Foundation, Minister Faiszer Mustapha said.

After the programme in Trincomalee, the Foundation noticed that this change should be brought upon to the Colombo District as well, especially after ruling out the plight of English language results from lesser known schools in the district.

To bridge this gap between learning the language as a subject at school, needed to be filled.

All four skills; reading, writing, speaking and listening would be taught during the six months. “This is not just an average English teaching programme. The focus would be laid out on English language to be taught as a language. This is an unconventional, well-programmed study scheme conducted by the Cosmopolitan Learning Centre.

“We had already been in Jaffna, in collaboration with Lanka IOC. This concept includes quite an interactive approach to teaching and we do not utilize the conservative way of school teaching. The concept is Cosmopolitans own developed, tried and tested teaching method. We engage in special training for our teachers I the right teaching technique to be used for this programme,” Thilak Silva of Cosmopolitan Learning Centre said.

35 teachers from the Colombo District have already been assigned for this programme. Whilst learning at Dhamma Schools, the programme had been set up to be followed as an additional class. “My aim is to diminish that gap seen between the English and the Non-English classes in schools around the country. English is a very much needed tool in todays’ growing world,” Minister Mustapha acknowledged.

Students will be allocated to segmented classes after undergoing a test that would mark them depending on their English knowledge and ability.

IOC sees this opportunity on a long term outlook and pledged their continuous support in bringing change to help in the education of children in the country.

President Mahinda Rajapaksa was the Chief Guest at the event.