Overcoming economic adversity through resilience and financial efficiency has been at the heart of Litro Gas strategy as the Company mitigates a powerful turnaround during challenging times.
“External circumstances such as the Easter Sunday attack and the Saudi drone attack in 2019 impacted our businesses but we have been strong enough to manage a successful turnaround,” says Litro Gas Lanka Ltd. and Litro Gas Terminal Ltd. Chairman and CEO Anil Koswatte.
“This year, the COVID-19 impact was felt considerably, but we were able to rise to the challenge and fulfil our obligations as the country’s leading supplier of domestic LPG.”
“A true test of our capability and strength came during the COVID-19 period – our responsibility to keep the stoves burning in Sri Lankan homes spanned across markets as our dedicated teams worked around the clock to make sure every home had its gas supply unbroken and consistent.”
Koswatte points out that Litro Gas used innovative and real time strategies in ensuring the customers were assured of a consistent supply of domestic LP Gas. “It was not just a testimony to our strength and industry capability but more importantly, a promise we had to keep to our customers as the market leader and the primary supplier of domestic gas to the nation.”
Yet, in a testimony to its resilience, economic challenges notwithstanding, Litro Gas went on to record an outstanding performance with a 3.5% YOY volume growth in 2019. A robust 2.3 percent volume growth in the first quarter of 2020 reiterates the Company’s effective response in mitigating the COVID-19 pandemic phase.
The cash flow from operating activities stayed strong when compared against other players in the industry – at Rs. 22 billion in 2019. Over Rs. 1.5 billion was dispersed to its shareholders at Rs. 32.3 per share in Litro Gas Lanka Ltd. (LGLL) and Rs. 3.66 per share in Litro Gas Terminal Lanka Ltd. (LGTL); majority of the shares are held by the Treasury. The Company recorded a turnover of Rs. 45 billion with PBT of Rs. 7 billion and a net profit of Rs. 5 billion.
The Company commands a market share of 75% as the country’s provider of domestic LPG. “The figures affirm the tremendous undertaking Litro Gas has as the industry leader,” says Koswatte.
The tough economic conditions only enhanced the Company’s strength, Koswatte adds, pointing out that gearing increased from 20% to 29%, confirmed as the highest in the history of the Company, following the undertaking of restructuring by Royal Dutch Shell in 1995.
Litro Gas Lanka Ltd. (LGLL) and Litro Gas Terminal Lanka Ltd. (LGTL) are owned by The General Treasury via Sri Lanka Insurance Corporation – an EBIT of Rs. 7 billion in total was delivered by both companies amounting to Rs. 2 billion generated by LGTL and Rs. 5 billion generated by LGLL.
Koswatte reiterates that maintaining strong fiscal discipline backed by a strengthening of the portfolio through strategic investments, was central to the Company’s outstanding success.
“We have always believed in sustaining a strong focus on growth and consolidation – despite the COVID-19 pandemic, Litro Gas was successful in purchasing outright the long term leased land where operations have been based since 1995.”
“The clear, concise and growth oriented leadership given by President Gotabaya Rajapaksa, Minister of Finance Mahinda Rajapaksa and Head of the Presidential Task Force Basil Rajapaksa was the vision driving our success. Securing the Rs. 2.5 billion transaction enabled Litro Gas Lanka Ltd. to add exceptional value to the Company’s asset base and value.”
Koswatte affirms that the Litro Gas success story is based on an approach comprising of three values that stand at the core of the business – interactive employee engagement, timely strategic shift in sales and marketing and the world class health and safety standards the Company stringently maintains.
“We operate in a highly competitive business landscape, which requires passionate and committed talent – our team comprising of 229 highly skilled specialists and digital natives operate through application of cutting edge technology and industry applications.
“Litro Gas understands the importance of a dynamic workforce driven by a vision of making a difference. Although the corporate landscape of Sri Lanka is replete with stories of pay cuts and downsizing, the Management of Litro Gas Lanka Ltd. has chosen to reward the staff who rose to the challenges of the COVID-19 pandemic. They were paid a ‘Risk Allowance’ that recognised their exceptional contribution towards a national responsibility.”