Laugfs Gas PLC and its subsidiaries, in a stock exchange filing of the unaudited financial statements for the fourth quarter ended 31 March 2013, had indicated a record performance with group revenue for the year under review crossing the Rs. 10 billion mark to reach Rs. 10.6 billion.
It is a landmark for the group of companies in its comparatively short history of business operations. It has achieved this feat despite the many unprecedented changes that have taken place over one and a half decades of its existence in virtually all aspects of the business environment that it was operating in. The group was able to withstand turbulent times and preserved the core of the business by staying focused on the fundamentals of the operation, while being willing to change everything else necessary to win and retain customers.
The profit before tax of the group was Rs. 1.3 billion, which is a remarkable growth of 29% over the previous financial year. The group’s total comprehensive income for the year, net of tax, was a commendable Rs. 1 billion as against Rs. 597 million last year, which is a creditable improvement. The total group assets increased by 3% to a position of Rs. 10.6 billion. The property, plant and equipment alone increased to Rs. 6.5 billion, with a net of depreciation increase of 18% over previous year. The productive investments made in this manner would accrue benefits to the shareholders in the ensuing years in the form of better returns, having comparatively shorter gestation periods and early paybacks.
The group’s retained earnings increased by 16% to Rs. 3.5 billion, while net assets increased by 8% to Rs. 6.5 billion. The net asset value per share increased to Rs. 16.76 from Rs. 15.58 last year. The earnings per share increased by 28%, from Rs. 2.14 to Rs. 2.74 per share. The group is determined to keep up this momentum uninterrupted in order to maximise the value of the shareholders’ investments in the future as well.
The downstream operations of LP gas once again recorded the highest ever revenue of Rs. 9.7 billion, an increase of 16% over the preceding year. The gross profit margin, however, reduced to 11% from the previous year’s 14%, mainly due to the escalation of world market prices of LP gas and due to the impact of the upward movement of foreign exchange rates that prevailed during the greater part of the financial year under review.
The company’s EBITDA surged to Rs. 1.6 billion, which is an increase of 62% over last year and is a creditable achievement in the wake of the uncertainties and slowdown of economic activities that were faced. The profit before tax of the company from continuing operations was Rs. 1.4 billion, an increase of 72% over the previous year.
The most striking and commendable achievement in terms of core business activity is that the organisation has more than doubled the total comprehensive income net of tax to Rs. 1.2 billion during the year under review from Rs. 411 million recorded last year. The company’s total liabilities reduced by 4% during the year to Rs. 3.9 billion. The company’s retained earnings had a notable surge of 27% from Rs. 2.3 billion last year to Rs. 3 billion in the current year.
This array of achievements, for both for the group and for the company in its core business activity, converged to underscore the strength of a financially healthy organisation that always meets its growth targets and maintains uninterrupted momentum, despite uncertain external environment forces that usually prevail. Despite all these impressive achievements, the company believes that Laugfs Gas’ best and most exciting days are yet to be seen.
The Board of Directors, having considered the financial performance, decided to declare first and final dividend of Rs. 1.50 per share for the financial year ended 31 March 2013. This is the third consecutive time the company declared dividends after its historic IPO in December 2010.
The LP gas industry globally is in the midst of a profound structural change as new sources of supply compete for market share and as cleaner sources of energy take a greater share of primary energy consumption. The industry globally can take heart that consumption so far has managed to keep pace with this production surge, despite the uncertainty created by the global economic slowdown. With the LP gas demand and supply equilibrium maintained at optimum levels, world market price stability is ensured at least in the short to medium term.
The company said that the LP gas industry locally has immense potential as a cleaner source of energy, also since penetration levels are comparatively very low in comparison to some Asian countries. There is a significant imbalance in energy usage which has to be adjusted with cleaner and more economic sources of energy like LP gas in this country. However, the key challenges facing the LP gas industry in the country in the ensuing years will be educating the authorities and decision makers concerned regarding the use of LP gas.
“In order to do so, the stakeholders involved are in need of effective, consistent communication using rigorous evidence based on data and analysis. Therefore, it is imperative that the industry must speak with a strong, unified voice to persuade the authorities, other stakeholders and financial markets to support the use of LP gas where appropriate,” a spokesman from Laugfs Gas Plc said.