Re-energised Laugfs Gas Ltd., yesterday announced a Group after tax profit of Rs. 750.3 million, for the first nine months of 2010/11 up by 96% over the corresponding period of last year.
The impressive bottom line was powered by a 32% increase in Group revenue to Rs. 5.32 billion.
The financial position of the Group had continued to improve with a total asset base of Rs.8.6 billion as at 31 December, 2010 in comparison to Rs.4.5 billion a year earlier.
The Net Asset Value too increased to Rs.6.1 billion as at 31 December 2010, higher from Rs. 1.5 billion a year earlier. The Group’s current assets now stand 1.8 times over its current liabilities, a reflection of a very healthy liquidity position. The diluted Earnings Per Share as at end of 31 December 2010 amounted to 2.82 higher from 1.45 recorded a year earlier.
Laugfs Gas Limited contributed to the group revenue with Rs. 4.87 billion for the period whilst earning a PAT of Rs: 638.27 million which is 61% increase over the same period last year. The growth in revenue of around 26% and also the increase gross margins contributed largely to this significant increase in PAT during the period under review.
Finance cost has reduced by 25% during the nine months period considered. The Gross Profit of Laugfs Gas Ltd increased 18% over the forecast whilst PAT increased over 28% against the forecasts made by the company.
The Company said cylinders sold in all pack sizes ranging from 2kg – 37.5kg increased substantially over both corresponding period last year and against the forecast.
“As committed in the prospectus prepared in connection with the IPO, part of its proceeds were applied in December 2010 in settlement of bank facilities previously obtained by the company and this had made the company virtually debt free. This will have significant impact on the bottom lines of the company in the ensuing months with the reduction of financial cost to be incurred in a substantial manner,” Laugfs Chairman W. K. H. Wegapitiya said in a note accompanying interim results.
He also said the period between our last review on 30th September 2010 to 31st December 2010, signified an important landmark of the company and added “which we believe will be a turning point in our journey.”
It was the launch and the successful completion of the Initial Public Offering of the company which drew an unprecedented response from the public oversubscribing the issue 22 times, through well over 60,000 applications, a demonstration of utmost trust and confidence in the company with an investment of Rs: 2.5 billion.
“I shall take this opportunity to convey once again our grateful thanks for the shareholders for having placed their trust and confidence with the company. Moreover we believe it is a commitment to an invaluable relationship filled with aspirations and it certainly should be more than an investment. We shall begin undoubtedly this new journey, to explore the bountiful opportunities and “Share the Golden Harvest” sooner than later,” Wegapitiya added.
The revenue of Laugfs Eco Sri Ltd increased during the period to Rs: 405.3 million from the previous year which is an improvement of 118%. The PAT for the period was Rs: 118.65 million and it was a loss of Rs12.77 million for the corresponding period last year. The cash generated from operations were Rs: 358.5 million whilst it was only Rs. 54.8 million during the corresponding period last year and this has contributed largely to reduce finance cost by 34% in the nine months of the current year. The company tested a record number of 859,409 vehicles for emissions during the current period as against 441,962 during the corresponding period last year.
Laugfs is scheduled to commence construction of 100 roomed hotel in Chillaw shortly with the utilisation of the proceeds of the IPO since all the preliminaries required had already been completed. In the meantime under the development of land base LP Gas storage capacity at Mabima complex is progressing and another 250mt capacity storage tank had been completed. The construction of the next storage tank of a similar capacity has commenced recently.
“The Laugfs Gas Limited and its subsidiaries are very confident of posting far better results at the end of the current financial year with innovative products being introduced into the market similar to groundbreaking initiative to introduce “Metal Cutting Gas” into the market. In conclusion I shall thank the shareholders and all the other stakeholders for having decided to be with us to reap the benefits of the business operations in the ensuing months and years,” Chairman Wegapitiya said.
Investors run on Laugfs
Laugfs Gas continued its bull run for yet another day as trading on its shares at an all time high prices dominated the Colombo stock market.
Laugfs voting shares generated the highest turnover of Rs. 877 million whilst its non voting shares produced the third highest turnover of Rs. 271.4 million.
The voting share peaked to a high of Rs. 58.20, before closing at Rs. 54, up by Rs. 5.40 whilst non voting despite the price band touched a high of Rs. 45.30 before losing steam to close at Rs. 40.50, down by 70 cents.
The voting shares closing price of Rs. 54 reflects a massive 108% increase in comparison to the level at which it finished 2010 at Rs. 25.90 and voting shares. Non voting too has increased by 119% from its Rs. 18.50 close in 2010.
Whilst most attribute the bull run to improved outlook for Laugfs’ earnings some opine the stock is overpriced. However the market is likely to re-rate the stock after the Company yesterday announced outstanding results beating projections by analysts.