Laugfs Gas records Rs.748mn net loss for 4Q as costs surge
Diversified conglomerate, Laugfs Gas PLC, posted a net loss of Rs.747.6 million for the March quarter (4Q17), against a net profit of Rs.120.9 million year-on-year (YOY) due to higher cost of sales and higher finance costs arising from the highly leveraged business, the interim financial accounts showed. The loss per share for the quarter was Rs.1.9, against earnings of 31 cents a share, YOY. However the group’s gross revenue for the quarter rose 30 percent YOY to Rs.5.07 billion.
Demand for liquefied petroleum gas (Lpg)—laugfs’ core business witnessed strong growth across most of Asia,
which contributed to Laugfs’ top line through its operations in Bangladesh and Sri Lanka, with major expansions planned in these countries as well as in Maldives and Myanmar.
Cost of sales for the quarter rose 48 percent YOY to Rs.4.4 billion as LPG prices globally witnessed a spike in February 2017 before subsiding due to supply disruptions, compared to some of the lowest LPG prices observed during the corresponding quarter in 2016 arising from supply gluts in the energy market. Laugfs group’s gross profits fell 27 percent YOY to Rs.683.6 million. The operating profit was however boosted by a Rs.124.4 million gain of bargain purchase on acquisition of subsidiaries. Administrative expenses increased 78 percent YOY to Rs. 879.5 million, while finance costs rose 190 percent YOY to Rs.578.8 million. Group net assets per share fell to Rs.19.7 at the end of the financial year (FY17) compared to Rs.21.7 at the start.
The total asset base expanded to Rs.35.8billion from Rs.27.3 billion as Laugfs started building a US$ 71.5 million LPG terminal in the Hambantota Port and purchased a third LPG carrier during FY17.
Of the group’s interest bearing loans and borrowings, the long-term component increased to Rs.15.4 billion at end of FY17 compared to Rs.7.9 billion at the start of the financial year, while the short-term component increased to Rs.4.3 billion from Rs.3.8 billion. Laugfs may go for even more debt in its books in the future to finance its planned US$ 100 million Bangladeshi expansion and expansions to the rest of Asia under the firm’s latest theme ‘from local to global’. For FY17, Laugfs net loss was Rs.638 million against a net profit of Rs.1.3 billion YOY. Revenue increased 36 percent YOY to Rs.18.07 billion, while cost of sales increased 44 percent YOY to Rs.13.9 billion, resulting in Rs.4.2 billion in gross profit, up 14 percent YOY. However, operating profits fell 49 percent YOY to Rs.1.05 billion, and finance costs increased 251percent YOY to Rs. 1.5 billion.
Laugfs energy segment posted a profit after tax (PAT) of Rs.272.4 million for FY17 down from Rs.1.2 billion YOY, while revenue increased to Rs.16.2 billion from Rs.11.8 billion YOY. The leisure and hospitality segment saw its post-tax loss widening to Rs.402.7 million from Rs.112.8 million, although revenue increased to Rs.416.1 million from Rs.355.8 million. The transportation and logistics segment posted a PAT of Rs.406.4 million, up from Rs.184.8 million through inter-segment operations. Property development and other services managed to cushion the group against further losses. Laugfs Holdings Limited held 73.45 percent of the company’s issued shares as at March 31, 2017. State-run private sector pension fund, Employees’ Provident Fund, held 17.28 percent of the company as the second largest shareholder.