Laugfs Gas deep in red amid higher global LPG prices
■ „Reports Rs.971mn net loss for 4Q21 ■ „Calls for implementation of LPG pricing formula
Laugfs Gas PLC reported nearly a billion-rupee loss for the three months ended March 2021 (4Q21) as the company was repeatedly prevented from raising gas prices in tandem with the rising world market prices of LP gas, forcing the company to absorb losses and accumulate more debt.
One of two cooking gas distributors in Sri Lanka, Laugfs Gas reported a net loss of Rs.971.2 million or Rs.2.51 a share for the company’s fiscal fourth quarter compared to Rs.880.6 million loss reported in the corresponding period in 2020.
Making matters worse, the company also had to contend with a weaker rupee, which made LP gas imports further costlier than ever before, according Laugfs Gas Chairman W.K.H. Wegapitiya.
Wegapitiya referred to the increase in the world LP gas prices during the period as, “unprecedented”, and called out the authorities for their continuous failure to implement the LP gas domestic pricing formula which they had agreed upon.
“If the pricing formula was in operation, the financial performance of the company would have been very much better and the consumers at large, would not have been burdened as well,” he added.
Due to continuous increase in world market prices for LP gas and the rising concerns of the company to operate as a going concern under the current retail prices, the Cabinet a couple of weeks ago decided to design a common platform for procurement, transportation and storage of gas for the two gas distributors using the Hambantota gas terminal.
However, to what extent that it will change the company’s financial fortunes is yet to be seen.
The company recorded revenues of Rs.10.4 billion for the three months, up 60 percent from the same period last year.
For the full year ended March 31, 2021 Laugfs Gas PLC generated revenue of Rs.35.5 billion, up 31 percent but ended up with a loss of Rs.685.5 million, compared to a loss of Rs.1.7 billion in the previous financial year.
This pushed the company’s retained losses to Rs.3.2 billion while the total equity, including non-controlling interest fell to Rs.545.6 million or 17 cents a share. The shareholder funds slumped to just Rs.67 million.
Meanwhile, the company had accumulated debt worth of Rs.31.6 billion while the payables also rose by about Rs.2.0 billion during the financial year.
The company’s trade segment, which perhaps forms the supermarket chain returned to make a profit of Rs.646.8 million from a loss of Rs.986.1 million.
Meanwhile, the transportation & logistics business of the group reported earnings of Rs.426.9 million compared to a loss of Rs.156.6 million while the property arm earnings little changed at Rs.108.9 million.
Employees’ Provident Fund (EPF) holds 17.28 percent stake in Laugfs Gas being its second largest shareholder. EPF also has 34.69 percent stake in the company’s nonvoting shares as the largest shareholder.