SRI LANKA EQUITY RESEARCH
ENERGY SECTOR
SECONDARY COVERAGE INITIATION
28 OCTOBER 2015
, LANKA IOC [LIOC] LIOC.N : LKR42.5
FAIR VALUE
Positive outlook given a transparent pricing formula…
: LKR51.7
RECOMMENDATION : BUY SHARE STATISTICS Bloomberg Ticker
LIOC SL
Reuters Ticker
LIOC CM
Market Cap. Avg. Daily T/O
(LKR bn) 22.6
(USD Mn)160.7
(LKR mn) 20.9
(USD ‘000) 148.8
N - Issued Shares (mn)
532.5
Free Float (%)
19.4
LIOC, backed by strong bilateral ties between India and Sri Lanka, hold a market share of c.18-20% in the auto fuel industry. The company is expected to grow in the medium term through falling global crude oil prices amidst negotiations held with the policy makers to implement a market based transparent pricing formula to reduce the volatility of auto fuel prices. Meanwhile LIOC hopes to expand their tank farm in Tricomalee by restoring the 99 upper tanks that are currently unsuitable for storage of fuel. Negotiations for the restoration are currently underway between the Indian and Sri Lankan governments. LIOC’s key areas of operations are the supply of auto fuel, bunker fuel, lubricants and bitumen. A substantial portion of LIOC’s revenue is generated through auto fuel sales which accounts for c.75% whilst bunkering, bitumen and lubricants contributed c.17%, c.5% and c.3% respectively to the topline during FY15.
Note : LKR/USD : 140.8
SHARE MOVEMENT YTD High/Low LKR)
3M 12M
64.5/29.0 44.2/33.1 68.3/29
LIOC (%)
(30.0)
23.5
(13.3)
ASPI (%)
(3.6)
1.0
(1.8)
MAIN SHAREHOLDERS As at 30th June 2015 VOTING Indian Oil Corporation Limited
75.1%
BOC - Ceybank Unit Trust
2.0%
Trading Partners
2.0%
HSBC Wasatch Frontier Fund
1.5%
Melton Bank - Acadian Frontier
0.8%
SHARE PRICE CHART (VOTING)
Topline grew at a 5 year CAGR of c.11% through FY11-FY15. Company revenue witnessed a dip of 2.3% YoY in FY15 and a CAGR of 11.5% through FY11-FY15 and is expected to grow at a CAGR of 1.2% through FY15-FY17E. Revenue dipped during the recent quarter 1QFY16 (-18.7% YoY) primarily due to the reduction in auto fuel prices which saw petrol and diesel prices plunge by c.20% and c.16% respectively. Declining global crude oil prices to favor LIOC’s bottom line growth. Meanwhile the recent fall in global crude oil prices to an average of c.USD49.3 per barrel from c.USD83.8 in 2014 aided LIOC’s 1QFY16 bottom line to record a c.116% QoQ growth to LKR171.0 mn cf. the loss of LKR1.1 bn in 4QFY15. However net earnings were down 85.8% YoY in 1QFY16 on the back of increased administration and distribution costs due to a salary revision in January 2015 for their Trincomalee staff. Also a c.9% YoY growth in auto fuel volumes was seen with the reduction in prices. Moreover LIOC also took a hard hit from the increase in tax on petrol sales from LKR12 to LKR35 per liter in 4QFY15 which resulted in auto fuel net sales continuing to decline in 1QFY16 and adversely affecting net earnings for the quarter. As per the management, in total the company pays c.57% of their selling price of auto fuel as taxes, where LKR27 per litre is paid as customs duty. Moreover they stated the loss per litre of petrol has reduced to c.LKR20.0 this quarter (2QFY16) cf. LKR60.0 as at 4QFY15. LIOC currently trades on 26.5x 4 quarterly trailing earnings whilst the group is expected to generate ROEs of 11.2% in FY16E and 11.3% in FY17E. Net earnings grew at a c.21% CAGR through FY11-FY15 and are expected to grow at a CAGR of c.13% in FY15-FY17E. Meanwhile its PBV denotes 1.1x for both FY16E and FY17E. The stock trades on 10.3x forecast FY16E net profit and 9.3x estimated FY17E net profit. If future prices are rationalized and government implements a transparent market based pricing formula in 4Q2015 LIOC will be able to subsist in the medium term and have a positive outlook. Given the single largest investment of Indian oil in Sri Lanka and close bilateral ties with India, we believe the policy makers would not take measures that would disadvantage LIOC. Hence we expect the share to trade at a PE multiple of 12.5x (based on historic PE trend) in FY16E to arrive at LKR51.7. We recommend BUY.
70.0 65.0 60.0 55.0 50.0 45.0 40.0 35.0 30.0 25.0
EARNINGS FORECAST
Sep-15
Jul-15
Aug-15
Jun-15
Apr-15
May-15
Mar-15
Jan-15
Feb-15
Dec-14
Oct-14
Nov-14
YE Mar/LKR mn
FY13
FY14
FY15
FY16E
FY17E
Net Profit (LKR mn)
2,909.2
4,813.4
1,885.7
*2,202.9
*2,421.6
YoY growth (%)
221.1%
65.5%
-60.8%
16.8%
9.9%
5.5
9.0
3.5
4.1
4.5
221.1%
65.5%
-60.8%
16.8%
9.9%
PE (x)
7.8
4.7
12.0
10.3
9.3
DPS (LKR)
1.0
2.0
1.0
1.2
1.3
BVPS (LKR)
24.5
32.0
34.0
37.0
40.3
EPS (LKR) YoY growth (%)
Lead Analyst : Secondary Analyst :
Suhendrini Yatawara Asanka Ranasinghe
PBV (x)
1.7
1.3
1.2
1.1
1.1
ROE (%)
22.3%
28.2%
10.4%
11.2%
11.3%
2.4%
4.7%
2.4%
2.7%
3.0%
Div Yield (%)
*Provided a transparent market based pricing formula is implemented in 4Q2015 .
Softlogic Stokbrokers (Pvt) Ltd., is a fully owned subsidiary of Softlogic Capital Plc and a 72% owned subsidiary of Softlogic Holdings PLC
1 P a g e
SRI LANKA EQUITY RESEARCH
ENERGY SECTOR
SECONDARY COVERAGE INITIATION
28 OCTOBER 2015
COMPANY OVERVIEW LIOC, having operated for more than 10 years is a subsidiary of India’s largest oil refiner Indian Oil Corporation which holds a 75.1% stake in LIOC. The company’s core acitivities are supplying high quality auto fuel, bunker fuel, lubricants and bitumen. Manufacturing is limited to production of lubricants and blending of high performance additives to make branded fuels at their Trincomalee terminal. LIOC currently holds an approximately 18% market share in the auto fuel industry, c.20% in lubricants and c.50% in both the bunkering and bitumen segments. Further the company has one associate company (33.3% stake), Ceylon Petroleum Storage Terminals Ltd (CPSTL) which distributes 700-800 Kilo Litres (KL) of auto fuel a day.
‘Currently holds a c.18% market share in auto fuel.’
Sri Lanka’s auto fuel retail is limited to LIOC and Ceylon Petroleum Corporation (CPC) where LIOC provides a range of petrol, diesel and lubricant products at 179 island wide stations. Xtrapremium 95, Lanka petrol 92 octane, Lanka petrol 90 octane and Xtrapremium Euro 3 are their petrol products while Lanka auto diesel, Xtramile, and Lanka super diesel are their diesel products. The company’s lubricant segment is through their brand “Servo” which has been endorsed by many international brands namely Hyundai, Volkswagen, Suzuki, Tata, Volvo and Cummins. Meanwhile LIOC is the leading bunker fuel supplier in the country carrying out bunkering operations at the Colombo Port and Marine Gas Oil (MGO) bunkering at the Trincomalee Port. Further they also offer (Off Port Limit) OPL bunkering facilities as well. Further Lanka IOC has been in the bitumen industry since 2010, and is currently one of the major suppliers to Sri Lanka providing two varieties of bitumen namely Bitumen 60/70 and Bitumen 80/100. LIOC purchases base oil from the Indian Oil Corporation and the international markets while bitumen and additives are purchased through international tenders. Meanwhile lubricant packaging is purchased locally. A substantial portion of LIOC’s revenue for FY15 was generated through petrol (c.39%) followed by diesel (c.36%) while bunkering, bitumen and lubricants contributed c.17%, c.5% and c.3% respectively
‘75% of LIOC’s revenue is from auto fuel.’
Revenue contribution FY15
17% 5% 3%
39%
Petrol
Diesel
Lubricants
Bitumen
Bunkering 36%
Source- Annual Report/ Softlogic Equity Research
Softlogic Stokbrokers (Pvt) Ltd., is a fully owned subsidiary of Softlogic Capital Plc and a 72% owned subsidiary of Softlogic Holdings PLC
2 P a g e
SRI LANKA EQUITY RESEARCH
ENERGY SECTOR
SECONDARY COVERAGE INITIATION
28 OCTOBER 2015
Global crude oil prices Global oil prices slumped c.41% YoY to USD49.3 today (15th October 2015) due to an oversupply as the demand for oil eased from China which is the 2nd largest oil consumer in the world. Meanwhile demand for oil is expected to be sluggish throughout FY16E with the anticipated return of Iranian crude to the market which will add to the oversupply. As per the International Energy Agency (IEA) the demand for oil is likely to fall to 1.2 mn barrels a day next year from a five year high of 1.8 mn barrels a day. Further they stated that the re-entry of Iran would drive production up by c.24% to 3.6 mn barrels a day.
‘Anticipated return of Iranian crude to the market will add to the oversupply’
Global crude oil prices (USD/Barrel) 120 110 100 90 80 70 60 50
Oct-15
Sep-15
Aug-15
Jul-15
Jun-15
May-15
Apr-15
Feb-15
Mar-15
Jan-15
Dec-14
Nov-14
Oct-14
Sep-14
Jul-14
Aug-14
Jun-14
May-14
Apr-14
Feb-14
Mar-14
40
Source- Bloomberg/ Softlogic Equity Research
Vehicle registrations Autofuel volumes have been growing over the past few months with the reduced prices on petrol and diesel and increasing new vehicle registrations. Buyers are anticipating tougher market conditions for vehicles in the later months as Finance Minister Ravi Karunanayake warned higher taxes on vehicles in the forthcoming budget. New vehicle registrations grew c.57% YoY in September 2015 to 63.7k units while it grew by c.32% YoY to 429.6k units in 2014.
‘New vehicle registrations grew c.57% YoY in September 2015’
Monthly new vehicle registrations 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0
2015
2014
Source- Central Bank annual report 2014/ Softlogic Equity Research
Softlogic Stokbrokers (Pvt) Ltd., is a fully owned subsidiary of Softlogic Capital Plc and a 72% owned subsidiary of Softlogic Holdings PLC
3 P a g e
SRI LANKA EQUITY RESEARCH
ENERGY SECTOR
SECONDARY COVERAGE INITIATION
28 OCTOBER 2015
Annual new vehicle registrations 600,000 500,000 400,000 300,000 200,000 100,000 0 2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
Total New vehicle registrations Source- Central Bank annual report 2014/ Softlogic Equity Research
Taxes LIOC also took a hard hit from the increase in tax on petrol sales from LKR12.0 to LKR35.0 per liter in 4QFY15 which resulted in auto fuel net sales continuing to decline in 1QFY16 and adversely affecting net earnings for the quarter. Further as per the management in total the company pays c.57% of their selling price of auto fuel as taxes. Out of which LKR27 per litre is paid as customs duty and LKR35.0 .
‘Increase in tax on petrol sales from LKR12 to LKR35 per liter in 4QFY15’
Auto fuel Lanka IOC which holds a c.18% market share in the auto fuel industry imports bulk auto fuel (final refined product) through international tenders from coutries such as Singapore, China, India and the Middle East and stores it at Trincomalee. The tank farm in Trincomalee comprises of 15 tanks which has a capacity of 10,000 Kilo Litres (10,000 MT) each and another 99 upper tanks which aren’t in suitable condition to be used. Meanwhile on average LIOC maintains a monthly consumption level of 40,000 MT of which consumption is split equally between petrol and diesel. Lubricants The lubricants industry comprises of thirteen parties (as at end of 2014) authorized to import, export, sell , supply and distribute lubricants in the country with only two parties authorized to blend lubricants. Base oil to manufacture lubricants is imported by LIOC through international tenders and is blended at their factory located at the Trincomalee tank farm. The factory has a monthly production capacity of 1,500 KL (1,500 MT) with consumption levels at 900 KL (900 MT) per month. LIOC is the second largest player (first is Chevron) in the lubricant industry through the brand “Servo”, with a market share of c.20% and hope to expand this to c.25% in the near future. Currently LIOC has 17 lube distributors and 144 “Servo” shops across the country. Meanwhile the company currently supplies lubricants to the government transport sector and hopes to enter into new partnerships with automobile brands and service shops. Further they also plan to supply marine line lubricants.
‘LIOC is the second largest player in the lubricant industry’
Softlogic Stokbrokers (Pvt) Ltd., is a fully owned subsidiary of Softlogic Capital Plc and a 72% owned subsidiary of Softlogic Holdings PLC
4 P a g e
SRI LANKA EQUITY RESEARCH
ENERGY SECTOR
SECONDARY COVERAGE INITIATION
28 OCTOBER 2015
Bunkering The bunkering industry comprises of 5-6 players with LIOC being the biggest player with a market share of c.50%. Bunker fuel is imported through international tenders mainly from Singapore, Fujairah and India. LIOC supplies around c.50,000 MT of bunker fuel a month and saw sales volumes increase by c.24% YoY in FY15. The company faces severe competition from the Indian port Kochi which competes on lower prices and their own crude oil refinery which has an annual capacity of 9.5 mn MT, while Lanka IOC has to accommodate the additional costs related to fuel imports. The Kochi refinery is a unit of the Bharat Petroleum Corporation Limited (BPCL) which is a Fortune 500 company.
‘LIOC is the biggest player in the bunkering industry with a market share of c.50%’
Meanwhile bunkering sales at Trincomalee port are in line with their 2015 estimate with the company reportedly having sold 4,000 MT during the period June/July. Lanka IOC has a capacity for 20,000 MT of 380 CST and 6,000 MT of MGO in its Trincomalee storage tanks. Further Lanka IOC has also commenced bunkering operations from its Trincomalee oil terminal to the vessels operating in Bay of Bengal. Moreover, LIOC hopes to expand their tank farm in Tricomalee by restoring the 99 upper tanks that are currently unsuitable for storage of fuel. Negotiations for the restoration are currently underway between the Indian and Sri Lankan governments. Bitumen The halt in road construction projects put pressure on LIOC’s bitumen sales which saw volumes contract by c.44% YoY in FY15. However with the resumption of the projects, for this financial year the company expects a volume of c.5,000 MT from highway contructions. Stocks are imported through international tenders mainly from the Gulf based on price and quality and stored in Kelaniya.
‘Expects a volume of c.5,000 MT from highway contructions’
Global comparison Company
Country
Trailing PE (x)
Market cap (USD Mn)
Attock Petroleum
Pakistan
13.1
413.5
Pakistan State Oil Co.
Pakistan
12.6
841.4
Bangchak Petroleum
Thailand
29.0
1,421.0
PTG Energy PCL
Thailand
52.7
746.1
India
13.7
10,164.6
Malaysia
11.4
198.2
Bharat Petroleum Petronas
Source- Bloomberg/ Softlogic Equity Research
Softlogic Stokbrokers (Pvt) Ltd., is a fully owned subsidiary of Softlogic Capital Plc and a 72% owned subsidiary of Softlogic Holdings PLC
5 P a g e
SRI LANKA EQUITY RESEARCH
ENERGY SECTOR
SECONDARY COVERAGE INITIATION
28 OCTOBER 2015
Financial Overview Net Revenue LIOC’s topline witnessed a CAGR of c.12% through FY11-FY15E and a dip of 2.3% YoY to LKR79.9 bn driven by the reduction in auto fuel prices which saw petrol and diesel prices plunge by c.20% and c.16% respectively. The reduction in auto fuel prices continued to wound LIOC’s net revenue during the recent quarter 1QFY16 which led LIOC to record an 18.7% YoY dip. Moreover LIOC also took a hard hit from the increase in tax on petrol sales from LKR12 to LKR35 per litre in 4QFY15 which resulted in auto fuel net sales continuing to decline in 1QFY16 and adversely affecting net earnings for the quarter. Hence between December 2014 to March 2015 the company sustained a revenue loss of LKR60.0 per litre of petrol. However as per the management, the loss per litre of petrol has now reduced to c.LKR20.0.
‘Topline witnessed a CAGR of c.12% through FY11-FY15E’
Meanwhile lubricant sales volumes grew c.11% YoY in FY15 through the expansion of distribution channels as LIOC added three new distributors. Bunkering sales volumes also grew by c.24% YoY in FY15 on the back of streamlined operations and higher efficiencies. However LIOC faced strong competition from Indian ports that competed through lower costs. Bitumen volumes fell by c.44% YoY in FY15 with the halt in construction projects. Going forward a net revenue CAGR of 1.2% is expected through FY15-FY17E amidst growing volumes due to increasing new vehicle registrations along with increasing disposable income. However, the tax on petrol will continue to affect topline unless prices are rationalized and a transparent pricing formula is implemented. Revenue and Gross profit 90,000
10,000
80,000
8,000
70,000 60,000
6,000
50,000
4,000
40,000 30,000
2,000
20,000
-
10,000 -
(2,000) FY10
FY11 Net Sales (LHS)
FY12
FY13
FY14
FY15
Gross profit (RHS)
Source- LIOC annual report 2015/ Softlogic Equity Research
Gross Profit Cost of sales saw a marginal growth during FY15 with GP margins falling by 424 bps YoY to c.6%. Meanwhile the recent fall in global crude oil prices to an average of c.USD49.3 per barrel from c.USD83.8 in 2014 aided LIOC’s cost of sales to record a c.16% dip in 1QFY16 causing gross profit to grow by c.333% QoQ to a LKR852.6 mn cf. a loss of LKR365.4 mn in 4QFY15. However, gross profit dipped c.51% YoY in 1QFY16. In the coming years GP is expected to grow at a 2 year CAGR of 10.3% with GP margins to reach c.7% levels by FY16E-FY17E.
‘GP is expected to grow at a 2 year CAGR of 10.3%’
Softlogic Stokbrokers (Pvt) Ltd., is a fully owned subsidiary of Softlogic Capital Plc and a 72% owned subsidiary of Softlogic Holdings PLC
6 P a g e
SRI LANKA EQUITY RESEARCH
ENERGY SECTOR
SECONDARY COVERAGE INITIATION
28 OCTOBER 2015
Margins 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% -2.0%
FY10
FY11 GP Margin
FY12
FY13 NP Margin
FY14
FY15 EBIT Margin
Source- LIOC annual report 2015/ Softlogic Equity Research
EBIT Performance With the incline of 5.3% YoY in distribution costs and decline of 3.9% YoY in administration expenses , EBIT dipped by 63.4% YoY in FY15. Meanwhile EBIT over the past 5 years saw a +c.28% CAGR due to the dip in administration costs. However EBIT margins have contracted by 438 bps YoY to 2.6% in FY15, whilst we anticipate operating margins to be maintained at 3% levels in FY16E-FY17E. In addition 1QFY16 EBIT dipped c.93% on the back of increased administration and distribution costs due to a salary revision that was carried out in January 2015 for their Trincomalee staff and c.9% YoY growth in auto fuel volumes with the reduction in prices. Net Profit As a result of the challenges faced, LIOC’s net earnings dipped c.61% YoY to LKR1.9 bn in FY15 cf. LKR4.8 bn in FY14 impacted chiefly by fall in topline. Further 1QFY16 bottom line recorded a c.116% QoQ growth to LKR171.0 mn cf. the loss of LKR1.1 bn in 4QFY15. However net earnings were down 85.8% YoY in 1QFY16. Meanwhile a net earnings CAGR of 21.1% was enjoyed by LIOC during the past 5 years whilst we expect a 13.3% CAGR for FY15-FY17E. Dividend payout LIOC declared a final dividend of LKR1.5 per share for FY14 having seen the their highest earnings yet during that financial year and distributed an interim dividend of LKR0.5 per share. However due to the sharp drop in retail prices along with an increase in excise duty on auto fuels, a final dividend of LKR1.0 per share was proposed for FY15. Going forward a dividend payout of c.28% is expected for both FY16E and FY17E with a dividend per share of LKR1.2 and LKR1.3 repectively.
‘Going forward a dividend payout of c.28% is expected for both FY16E and FY17E’
Softlogic Stokbrokers (Pvt) Ltd., is a fully owned subsidiary of Softlogic Capital Plc and a 72% owned subsidiary of Softlogic Holdings PLC
7 P a g e
SRI LANKA EQUITY RESEARCH
ENERGY SECTOR
SECONDARY COVERAGE INITIATION
28 OCTOBER 2015
OUTLOOK & EVENT UPDATES Lanka IOC believes if future prices are rationalized and pricing policies are implemented they will be able to subsist in the medium term and have a positive outlook for the future. Further, they have urged the authorities to review the existing pricing policies. Moreover the commencement of the Central expressway and extension of the Southern expressway is expected to improve their Bitumen sales in the coming years. In addition Lanka IOC is also planning on investing LKR400 mn to add another 20 fuel stations to the current network, while also completing refurbishments of the existing fuel outlets. The company has also plans to export lubricants to test the markets of Indonesia and Malaysia. In this regard, extensive market surveys have already been conducted and revamped Lanka IOC lubricants to be launched in the new financial year. VALUATIONS AND RECOMMENDATION Lanka IOC currently trades on 26.8x 4 quarterly trailing earnings. The group is expected to generate ROEs of 11.2% in FY16E and 11.3% in FY17E. Net earnings grew at a c.21% CAGR through FY11-FY15 and are expected to grow at a CAGR of c.13% in FY15-FY17E. Meanwhile its PBV denotes 1.2x and 1.1x for FY16E and FY17E respectively. The stock trades on 10.5x forecast FY16E net profit and 9.6x estimated FY17E net profit. Meanwhile if future prices are to be rationalized and if the government implements a transparent market based pricing formula they will be able to subsist in the medium term and have a positive outlook for the future. Further, they have urged the authorities to review the existing pricing policies. Given the single largest investment of Indian oil in Sri Lanka and bilateral ties with India we believe the policy makers would not take measures that would disadvantage LIOC. Moreover the commencement of the Central expressway and extension of the Southern expressway is expected to improve their Bitumen sales in the coming years. Hence we expect the share to trade at a PE multiple of 12.5x (as per PE band) in FY16E to arrive at LKR51.7 and therefore recommend BUY. LIOC PER Band (LKR)
140 120 100 80 60
13X
40
9X
20
5X
11X 7X
Apr-12 May-12 Jul-12 Sep-12 Nov-12 Dec-12 Feb-13 Apr-13 Jun-13 Aug-13 Sep-13 Nov-13 Jan-14 Mar-14 Apr-14 Jun-14 Aug-14 Sep-14 Nov-14 Jan-15 Mar-15 May-15 Jun-15 Aug-15 Oct-15 Nov-15 Jan-16 Mar-16
0
Softlogic Stokbrokers (Pvt) Ltd., is a fully owned subsidiary of Softlogic Capital Plc and a 72% owned subsidiary of Softlogic Holdings PLC
8 P a g e
SRI LANKA EQUITY RESEARCH
ENERGY SECTOR
SECONDARY COVERAGE INITIATION
28 OCTOBER 2015
FINANCIAL SUMMARY INCOME STATEMENT YE Mar/LKR mn
FY13
FY14
FY15
FY16E
FY17E
75,111
81,793
79,901
79,951
81,898
Cost of Sales
(69,721)
(73,481)
(75,168)
(74,642)
(76,135)
Gross profit
5,389
8,312
4,733
5,309
5,763
38
31
40
44.1375
48.55125
(1,676)
(1,748)
(1,841)
(2,035)
(2,265)
(889)
(875)
(841)
(900)
(968)
-
-
-
-
-
Net Sales
Other operating income Selling and distribution expenses Administrative exepnses Write-back of disallowed input VAT OPEX
(2,565)
(2,624)
(2,683)
(2,935)
(3,232)
Operating profit
2,862
5,719
2,090
2,418
2,579
Finance income
267
301
488
579
691
Finance costs Profit before tax Tax
(139)
(258)
(328)
(368)
(380)
2,991
5,762
2,251
2,629
2,890
(81)
(948)
(365)
(427)
(469)
2,909
4,813
1,886
2,203
2,422
YE Mar/LKR mn
FY13
FY14
FY15
FY16E
FY17E
Non-Current Assets Property, plant and equipment Investment Intangible assets Total Non-Current Assets
3,265 4,394 678 8,337
3,341 4,394 677 8,412
3,673 4,394 675 8,742
3,877 4,394 675 8,946
4,145 4,394 675 9,214
Current Assets Inventories Trade and other receivables Income tax recoverable Current tax recoverable Cash and cash equivalents Total Current Assets
10,240 2,570 365 3,187 16,363
7,929 1,886 8,758 18,573
5,635 1,170 242 7,752 14,800
5,596 1,171 9,376 16,143
5,708 1,197 10,742 17,647
Total Assets
24,700
26,985
23,541
25,089
26,861
Equity Capital and reserves Stated capital Retained earnings Total Equity
7,577 5,452 13,028
7,577 9,466 17,043
7,577 10,548 18,125
7,577 12,129 19,706
7,577 13,867 21,444
41 5 47
47 30 77
61 55 116
61 30 91
61 38 100
Current Liabilities Trade and other payable Income tax payable Borrowings Total Current Liabilities
7,258 4,367 11,625
3,213 529 6,123 9,864
1,303 3,998 5,301
1,294 3,998 5,292
1,320 3,998 5,317
Total Equity and Liabilities
24,700
26,985
23,541
25,089
26,861
Profit for the year
BALANCE SHEET
Non-Current Liabilities Retirement benefit obligations Deferred tax liability Total Non-Current Liabilities
Softlogic Stokbrokers (Pvt) Ltd., is a fully owned subsidiary of Softlogic Capital Plc and a 72% owned subsidiary of Softlogic Holdings PLC
9 P a g e
SRI LANKA EQUITY RESEARCH
ENERGY SECTOR
SECONDARY COVERAGE INITIATION
28 OCTOBER 2015
Softlogic Research Guide to Investment Rating BUY Trading BUY Neutral Take Profit Sell Not Rated
: : : : : :
Share price may exceed 15% over the next 12 months Share price may exceed 7.5% over the next 3 months, however longer-term outlook could vary Share price may fall within the range of +/- 7.5% over the next 12 months Target price has been attained. Look to accumulate at lower levels Share price may fall by more than 15% over the next 12 months Stock is not within regular research coverage
Equity Research
Danushka Samarasinghe
[email protected] +94 11 7277001, +94 77-3020231
Asanka Ranasinghe
[email protected] + 94 11 7277035, +94 77-1078497
Tharushi Perera
[email protected] + 94 11 7277034, +94 77-3482321
Shadini Silva
[email protected] + 94 11 7277036
Suhendrini Yatawara
[email protected] +94 11 7277032
Shewmay Chang
[email protected] +94 11 7277033
Ranjan Ranatunga
[email protected] +94 11 7277031
Nishanthi Hettiarachchi
[email protected] +94 11 7277030, +94 11 77 1078499
Equity Sales Dihan Dedigama Hussain Gani Rohan Fernando Prasanna Chandrasekera Eardley Kern Andre Lowe Achindi Silva Hisham Haniffa Vino Ramasamy Jeevan Hettigoda Dilip Fernando
[email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected] [email protected]
+94 11 7277010 / +94 117277055, +94 777689933 +94 11 7277020 / +94 777992086 +94 11 7277005 / +94 767782101 +94 11 7277056 +94 11 7277053, +94 777348018 +94 11 7277052, +94 777230040 +94 11 7277054, +94 77 3825087 +94 773828781 +94 11 7277059, +94 77 9596486 +94 11 7277051, +94 77 3782661 +94 11 7277000 +94 77 3379730
[email protected]
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The information contained in this report is for general information purposes only. This report and its content is copyright of Softlogic Stockbrokers and all rights reserved. This report- in whole or in part- may not, except with the express written permission of Softlogic Stockbrokers be reproduced or distributed or commercially exploited in any material form by any means whether graphic, electronic, mechanical or any means. Nor may you transmit it or store it in any other website or other form of electronic retrieval system. Any unauthorised use of this report will result in immediate proceedings. The report has been prepared by Softlogic Stockbrokers (Pvt) Ltd, Sri Lanka. The information and opinions contained herein has been compiled or arrived at based upon information obtained from sources believed to be reliable and in good faith. Such information has not been independently verified and no guaranty, representation or warranty, express or implied is made as to its accuracy, completeness or correctness, reliability or suitability. All such information and opinions are subject to change without notice. This document is for information purposes only, descriptions of any company or companies or their securities mentioned herein are not intended to be complete and this document is not, and should not be construed as, an offer, or solicitation of an offer, to buy or sell any securities or other financial instruments. In no event will Softlogic Stockbrokers be liable for any loss or damage including without limitation, indirect or consequential loss or damage, or any loss or damage whatsoever arising out of, or in connection with the use of this report and any reliance you place on such information is therefore strictly at your own risk. Softlogic Stockbrokers may, to the extent permissible by applicable law or regulation, use the above material, conclusions, research or analysis in which they are based before the material is disseminated to their customers. Not all customers will receive the material at the same time. Softlogic Stockbrokers, their respective directors, officers, representatives, employees, related persons and/or Softlogic Stockbrokers, may have a long or short position in any of the securities or other financial instruments mentioned or issuers described herein at any time and may make a purchase and/or sale, or offer to make a purchase and/or sale of any such securities or other financial instruments from time to time in the open market or otherwise, in each case either as principal or agent. Softlogic Stockbrokers may make markets in securities or other financial instruments described in this publication, in securities of issuers described herein or in securities underlying or related to such securities. Softlogic Stockbrokers may have ently underwritten the securities of an issuer mentioned herein.
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