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Litro profits up despite lower price

20 Sep 2020

By Uwin Lugoda Litro Gas Lanka has reported a growth in their profit before tax (PBT) to Rs. 1.2 billion Year-To-Date (YTD), a growth of 2% compared to the full year 2019 PBT, which is likely to increase to 10% by the end of the year, according to Litro Gas Chairman/CEO Anil Koswatte. Speaking to The Sunday Morning Business, he said that this profit growth was achieved despite a Rs. 240 reduction of their prices, from Rs. 1,733 last year to Rs. 1,493 this year. “We are expected to see Rs. 1.5-2 billion during the year, after tax, despite the fact that when compared to last year, our prices have reduced. We have managed to make a profit while giving our consumers a great economic benefit,” he said. The Rs. 240 reduction in gas prices came on 4 October 2019, after the Government agreed on the reduction following the recommendations by the Cost of Living Committee. Koswatte stated that their market share has grown to 76% in 2020 from 75% last year. The privately owned Laugfs Gas accounts for the remaining 24%. Litro Gas Lanka was also awarded a contract for the supply of empty metal cylinder containers for liquid petroleum gas (LPG) for the year 2020. The awarding of this contract was approved by the Cabinet of Ministers on 9 September and was proposed by Prime Minister Mahinda Rajapaksa in his capacity as the Minister of Finance. The awarding includes the supply of 22,000, 105,056, and 1,260 cylinders, respectively, under the categories of 2.3 kg, 12.5 kg, and 37.5 kg for an amount of $ 2.18 million to M/s Metal Mate Co. Ltd., as well as the supply of 117,040 cylinders under the category of 5 kg for an amount of $ 1.58 million to Sahamitr Pressure Container Public Co. Ltd. Metal Mate is the leader in manufacturing pressurised gas containers in Thailand. Sahamitr Pressure Container is a Bangkok-based internationally recognised manufacturer of LPG cylinders for the global market. Koswatte stated that from the days of Shell Gas in 1995 to when Litro Gas was established in 2010, new cylinders known as “new issues” are added to the market every year, which is seen as a market development initiative that builds the customer base.  “We give this at a nominal cost to the customer. Therefore, this contract benefits both Litro Gas and the customer as a form of an economic benefit.” Sri Lanka reportedly needs approximately 700, 000 new cylinders per annum.  Litro Gas has revenue of over Rs. 45 billion. The company was initially bought over from Shell Gas by the state in a process to reverse the privatisation process which had preceded it.


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