A unit of the Fortune 500 IOC, LIOC's fuel sales dipped 28 per cent to Rs 6.78 billion from July to September over the same period 2005. The firm made a net loss of Rs 605.12 million during the second quarter of 2006, over a profit of Rs 175.09 million in 2005.
For the six months to September, sales fell to 10.45 per cent to Rs 15.72 billion, with losses piling up to 1.189 billion rupees, LIOC said.
Lanka IOC, which owns a third of Sri Lanka's fuel sheds, stopped supplying gasoline and diesel to its outlets in June when the losses climbed up to Rs 7.6 billion.
Both sides struck a compromise, where LIOC was allowed to fix prices across its fuel sheds in August, while Colombo agreed to payback Rs 5.16 billion.
However, Colombo has yet to ink the settlement, where LIOC gets Rs 700 million in cash and Rs 4.46 billion worth of 2-year bonds priced at 11 per cent.
Part of the settlement deal includes aborting LIOCs agreement with Colombo, due to end in 2008 and cutting profit margins (calculated as 5.0 per cent on base retail prices before value added tax to 1.5 per cent -- which works out to
Rs 2.4 billion).
Provided the subsidy money flows in, LIOC is hoping to make a small profit when the current financial year ends in March '07, its chairman Sarthak Behuria said in October.
"Our financials for the remaining period depends on the prices of crude in the world market and our ability to pass on the impact to consumer," he said.
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