Lubricants and greases manufacturer Lanka IOC reported that its second-quarter operating profit fell to Rs 2.6 billion rupees (U.S. $8.1 million) for the quarter, compared to Rs 13.3 billion.

Sales revenue increased 10% to Rs 54.7billion for the quarter. Cost of sales jumped 43% to Rs 49.3 billion, dragging gross profit down to Rs 5.5 billion. Net profit fell 75% to Rs 2.4 billion, from Rs 9.9 billion.

Lanka IOC commissioned a 3,000 metric tons per year grease production plant in September 2022 in Trincomalee, on Sri Lanka’s east coast.

Chevron Lubricants Lanka

Colombo-based Chevron Lubricants Lanka reported a 53% drop in operating profit to Rs 1 billion in the second quarter, compared to Rs 2.1 billion.

In interim financial statements released on the Colombo Stock Exchange, the company said net profit decreased 5% to Rs 749.4 million. Although finance costs fell 99% in the quarter to Rs 13.2 million, income tax expenses were up by 86% at Rs 347.2 million.

The company – which imports, blends, distributes and markets lubricants and greases – operates a blending plant in Sapugaskanda.

Sri Lanka’s economy has been battered by the impacts of the COVID-19 pandemic and inflation. The government in March reached an agreement with the International Monetary Fund for a nearly $3 billion bailout, pending debt restructuring with creditors. According to media reports, currency has appreciated around 10% this year since then, and the government estimates the country’s economy will contract 2% this year, after declining 8% last year.