LAUGFS gets Sinosure financing
On the back of securing a financing facility of US$ 20 million by China Export and Credit Insurance Corporation (Sinosure) for the 30,000 Metric Tonnes (MT) Import and Export Terminal at Hambantota, LAUGFS Terminals Ltd is mulling some options to fund the rest of this mega project, top officials say.
LAUGFS Gas PLC and Standard Chartered on Friday jointly announced to the media the first private sector facility in Sri Lanka by Sinosure.
The company on its own put down $24 million on this $80 million project and also has a banking facility of $20 million “We may go for a joint venture or a loan for the balance $16 million,” the official noted.
The Import and Export Terminal will be commissioned in April 2018, and is expected to be a significant revenue generator for the group as well as contribute to the GDP of the country. The official noted to the Business Times that LAUGFS Gas is planning the groundwork to enter the Myanmar market soon with their Liquefied Petroleum Gas (LPG) and lubricants. “The operation in Myanmar will be a Greenfield one,” he said adding that through their subsidiary, LAUGFS Gas Bangladesh Ltd; they will expand their operations there with LPG cylinders.”
LAUGFS Gas recorded a net loss of Rs. 455. 8 million for its 1Q18 against a profit of Rs. 25.8 million reported during the same period last year.
The losses were owing to the controlled LPG prices in Sri Lanka the company has said noting that despite higher global LPG market prices, the company has been unable to pass the price changes to the consumers.
“Whilst investments made in some areas such as renewable energy sector are already yielding profits, certain other long term investments will be of longer gestation periods,” W.K.H. Wegapitiya, Chairman and Group CEO has said. This is coupled with the company’s core business of LPG downstream activities having to continue under the prevailing retail price restrictions whilst LPG prices in the global market are surging. This saw the finances for this quarter recording a loss after tax Rs. 508 million. “We are confident that we will receive a positive response in this regard very soon. In addition to the aforementioned, the company is also pursuing strategic partnerships to enhance funding and create requisite marketing channels and opportunities which will no doubt bring in the expected returns in the years to come,” Mr. Wegapitiya noted.
The company reported a loss per share of Rs. 1.18 from a profit of 7 cents a share a year ago.