While scaling-down Sri Lanka LP Gas operation due to dollar crisis in the island, LAUGFS Gas PLC announced that it has divested its retail LPG business in Bangladesh for $ 23.4 million (around Rs. 8.5 billion).The divestment was via stakes held by two entities.
LAUGFS Gas sold 69% stake in LAUGFS Gas Bangladesh Ltd. for $ 16.146 and the remaining 31% stake held via the fully owned subsidiary – Slogal Energy DMCC (Specializes in procurement and trading of LPG) registered in UAE for $ 7.254 million.
Proceeds are net of LAUGFS Gas Bangladesh debt and will be utilized to reduce the debt exposure of LAUGFS Gas Plc Group.
LAUGFS entered Bangladesh in 2015 becoming the first Sri Lankan energy brand to become a multinational with the acquisition of Petredec Elpiji Ltd., and established LAUGFS Gas (Bangladesh) Ltd. In 2018 it signed agreement with Total Gas Bangladesh on cylinder filling as well as installed a cylinder re-qualification plant in Bangladesh which has over 30 companies engaged in LP retail business.
LAUGFS Gas Chairman W.K.H. Wegapitiya said that despite exit from retail business, the Company will continue to enhance its LPG upstream business, transportation and logistics, trading as well as focus more on LAUGFS lubricants, the latest entrant in Bangladesh.
As at 30 September 2022, LAUGFS Gas Group held long-term borrowings of Rs. 21.2 billion, up from Rs. 15.3 billion a year ago and Rs. 16.5 billion as at end FY22.
Short term borrowings amounted to Rs. 25.7 billion as at 30.9.2022, up from Rs. 18.6 billion a year ago and Rs. 23.3 billion by end FY22.
In 1Q of FY23 finance cost incurred was Rs. 859.4 million and it rose to Rs. 1.2 billion in 2Q. The Company in its interim accounts said there was no change in the loan portfolio in 2Q and the increase was solely due to the increase of interest rates charged by the banks.
“If the finance cost remained same as for the first quarter the company would have ended with better operational results during the 2Q ended 30 September 2022.
The financial results of LAUGFS Gas PLC were impacted with further escalation of interest rates charged by the respective banks with the corresponding policy rate increases by the Central Bank of Sri-Lanka from time to time.
LAUGFS Gas also faced constraints continued to prevail in drawing Letters of Credit in favour of international suppliers of LP Gas during 2Q as well due to limited foreign exchange availability in the banking system, and this affected the regular supplies of LP Gas.
Group revenue in 2Q was Rs. 8.1 billion down year on year by 27% whilst in 1H it declined 22% to Rs. 16 billion.
The second quarter saw an operating profit of Rs. 755 million as against a loss of Rs. 590 million. In the first half operating loss was reduced to Rs. 146 million as against a loss of Rs. 1.1 billion a year ago.
Pre-tax loss in 2Q was Rs. 811 million, lower in comparison to Rs. 1 billion loss. In 1H pf FY23, the pre-tax loss was Rs. 2.9 billion, higher as against Rs. 2.1 billion loss in 1H of FY22.
