Earnings Review - Q1 FY 16

65, Braybrooke Place, Colombo 2, Sri Lanka

research@bartleetreligare.com, +94 11 5220200

09 June 2016

BRS Research

Chevron Lubricants Lanka PLC (LLUB: LKR 332.90)

Head of Research - Nikita Tissera

Senior Research Analyst - Jennita Fernando

Tax concerns reverse an otherwise great story : HOLD

LLUBs Q1 FY 16 bottom line grew 32.7% YoY to LKR 986mn resulting in an EPS of LKR 8.22.
Higher volumes from both industrial and automobile sectors, savings from lower base oil
prices and growth in finance income (+42% YoY) bolstered quarterly earnings. The company
recorded probably its highest ever GP margin of 48.7% and EBIT margin of 41.6% in Q1 FY 16.
Top line grew 11% YoY to LKR 3.12bn mainly driven by volumes induced by discounts and
promotions. We believe the rise in motor vehicle registrations during FY 2015 (+56% YoY) to
aid lubricant volumes in the foreseeable future. Our previous BUY call was based on the reduced corporate tax of 15% and risk free rate of 9.95%. However we no longer look at tax
reduction as a real possibility and have adjusted our forecast accordingly. We have arrived at
a DCF based TP of LKR 314 and DPS inclusive total return of LKR 338 (+2% on CMP) presubdivision, and downgrade to HOLD.
All figures in LKR mn
Revenue
Revenue growth (%)
Gross profit
Gross profit margin (%)
EBIT recurring
EBIT margin (%)
Profit attributable to equity holders
BRS EPS As Adjusted (LKR)
BRS EPS growth (%)
NAV per share (LKR)
DPS (LKR)
Dividend yield (%)
P/E (x)
P/BV (x)
ROE %

2012
11,754
6.5%
3,804
32.4%
2,913
24.8%
2,261
18.84
13.7%
34.45
11.00
5.4%
10.7 x
5.9 x
62.0%

2013
11,197
-4.7%
4,120
36.8%
3,174
28.3%
2,531
21.10
11.9%
40.33
15.00
5.6%
12.7 x
6.6 x
56.4%

2014
11,520
2.9%
4,603
40.0%
3,566
31.0%
2,742
22.85
8.3%
43.33
20.00
5.0%
17.5 x
9.2 x
54.6%

2015
11,564
0.4%
5,196
44.9%
4,143
35.8%
3,092
25.77
12.8%
39.06
23.00
6.7%
13.4 x
8.8 x
62.5%

2016E
12,060
4.3%
5,691
47.2%
4,737
39.3%
3,595
29.96
16.3%
45.02
24.00
7.2%
11.1 x
7.4 x
71.3%

2017E
13,206
9.5%
6,520
49.4%
5,440
41.2%
4,098
34.15
14.0%
55.17
24.00
7.2%
9.7 x
6.0 x
68.2%

2018E
14,833
12.3%
7,815
52.7%
6,613
44.6%
5,036
41.96
22.9%
72.14
25.00
7.5%
7.9 x
4.6 x
65.9%

Source: Company data and BRS Equity Research

Top line growth steered by volumes

The top line grew 11% YoY to LKR 3.12bn in Q1 FY 16 aided by demand across industrial and
automobile sectors from both local and export sales. The company offered discounts and promotions to share the benefit of lower base oil prices, resulting in higher volumes. Further, during CY 2015, total motor vehicle registrations grew by ~56% whilst motor car registrations increased by ~172% YoY to 106,000. The growth in automobile sector would bode well for LLUB in
the medium to long term, as ~75% of its top line is dependent on the automobile sector. The
previously NBT exempt lubricant industry has now been slapped with 2% NBT together with the
4% rise in VAT to 15%. However, the industry as a whole expects to pass these taxes to the end
customer, and we have not factored in the possible resultant impact on volumes, in our forecasts. We have assumed a volume growth of 12% and price reduction of 3% in FY 2016E and
volume growth of 4% and price increase of 8% in FY 2017E and FY 2018E respectively.

Trading Snapshot
Market cap (LKR mn)

271

Outstanding equity shares (mn)

120

Public Holding (%) - Mar '16

49.00%

52-week High/Low (LKR)

415.00/300.00

YTD ASPI return (%)

-5.3%

YTD Stock return (%)

-3.2%

Dividend Yield (%)

7.2%

Beta

0.46

Valuation Summary
CMP (LKR)

332.90

Intrinsic value (LKR)

314.56

DPS (LKR)

24.00

Target price based on total return (LKR)

338.56

Valuation method

DCF valuation

Total return %

1.7%

Rating

Hold

LLUB Price Vs ASPI Movement

ASPI

LLUB (LKR)

ASPI
LLUB

8000

500
450

7000
400
6000

350
300

5000
250
4000

200

Apr-14

Margins expand with base oil price savings

LLUB achieved its highest GP and EBIT margins so far in Q1 FY 16, with the GP margin at 48.7%
(Q1 FY 15 42.5%) and EBIT margin at 41.6% (Q1 FY 15 35.5%). Such an achievement was
realised, as the company shifted its focus from maintaining market share to margin share, coupled with savings from lower base oil prices, despite the sluggish industry growth climate. We
have maintained GP margins at ~46% and EBIT margins at ~38% from FY 2016E to FY 2018E.

39,948

Market cap (USD mn)

Nov-14

May-15

Dec-15

Jun-16

DPS and Payout Ratio

DPS (LKR)

%
DPS

32.00

Payout ratio

28.00

100%

24.00

Valuation ~2% upside on total return; downgrade to HOLD

We have revised the corporate tax rate to pre-budget level of 28%, given the delay in legalising
the proposed rate of 17.5% (refer sensitivity on pg 4). In addition, the risk free rate has risen by
~2% and MPS by ~10% since the last review. Hence, our DCF based valuation has dropped to
LKR 314 with a total return of LKR 338 and we downgrade to HOLD. The post-subdivision TP
should be halved from the current levels. On relative valuations, LLUB trades at a forward PER
of 11.1x (FY 2016E EPS LKR 29.96) based on CMP. The sector PER stood at 8.8x as at
08.06.2016.
For analyst certification and other important disclosures, please refer to the Disclosure and
Disclaimer section at the end of this report.

120%

80%

20.00
60%

16.00

40%

12.00
8.00

20%
2012

2013

2014

2015 2016E 2017E 2018E

Page 1

Company Information Note

65, Braybrooke Place, Colombo 2, Sri Lanka
research@bartleetreligare.com, +94 11 5220200

09 June 2016

Chevron Lubricants Lanka PLC (LLUB)

Company profile
Chevron is in the business of importing, manufacturing and marketing of lubricants, greases,
brake fluid and specialty products. It is the market leader with a ~52% market share in a very
competitive industry with 13 licensed players. It
also exports finished goods to Maldives and
Bangladesh, though on a relatively smaller scale.
The company relocated its blending plant to
Sapugaskande in November 2014 with an additional capacity of ~20%.

Revenue LKR 'mn % Growth (2012-18E)

12%
11,754

-5%

3%

0%

2012

2013

2014

2015

4%

14,833

10%

2016E 2017E 2018E 2018E

Revenue breakdown
Local sales

Export sales

8%
FY 2015

8%

FY 2014

92%

92%

Trend in EPS and DPS

EPS (LKR)
45.00
EPS

40.00

DPS

DPS (LKR)
28.00
24.00

35.00

20.00

30.00
16.00
25.00
12.00

20.00

8.00

15.00
10.00

4.00
2012

2013

2014

2015

2016E 2017E 2018E

Year Ending 31st December

Summary Information
BRS EPS as adjusted (LKR)
BRS EPS growth (%)
P/E (x)
Reported EPS adjusted for split (LKR)
Sector PE (x)
P/E on reported EPS (x)
NAV per share (LKR)
P/BV (x)
Sector PBV (x)
DPS (LKR)
Dividend yield (%)
FCFF (LKR 000)
FCFE (LKR 000)
CFPS (LKR)
P/CFPS (x)
Mkt price adjusted for splits
Weighted average shares (000)
Average mkt cap (LKR 000)
Enterprise value (LKR 000)
EV/Sales
EV/EBITDA
Income Statement (LKR 000)
Revenue
Gross profit
EBITDA recurring
Depreciation and amortisation
EBIT recurring
Interest income
Interest expense
Exceptionals/non-recurrings
Tax expense
Net income
Profit attributable to equity holders
Statement of Financial Position (LKR 000)
Cash and cash equivalents
Inventories
Trade receivables
Fixed assets
Shortterm investments
Total assets
Trade payables
Interest bearing debt -short term
Interest bearing debt -long term
Total liabilities
Shareholders equity
Total equity
Net debt (cash)
Total capital employed
Casf flow (LKR 000)
Cash flow from operations
Net working capital
Capital expenditure
Free cash flow
Investing cash flows
Equity capital
Dividends paid
Net borrowings
Other financing cash flows
Net cash flow
Key ratios
Revenue growth (%)
EBIT growth (%)
Gross profit margin (%)
EBITDA margin (%)
EBIT margin (%)
Net profit margin
ROCE %
ROE %
Payout ratio (%)
Debt/equity (%)
Net debt/equity (%)
Gearing (%)
Interest cover (x)

2012

2013

2014

2015

2016E

2017E

2018E

18.84
13.7%
10.7 x
18.88
9.9x
10.7 x
34.45
5.9 x
1.6x
11.00
5.4%
2,846,205
2,846,427
12.25
16.5 x
202.00
120,000
24,240,000
21,722,756
1.8 x
7.3 x

21.10
11.9%
12.7 x
21.10
13.0X
12.7 x
40.33
6.6 x
1.8x
15.00
5.6%
1,587,596
1,587,680
(0.27)
nm
267.80
120,000
32,136,000
29,650,826
2.6 x
9.2 x

22.85
8.3%
17.5 x
22.89
22.1x
17.5 x
43.33
9.2 x
2.7x
20.00
5.0%
1,740,841
1,741,166
(9.96)
nm
399.60
120,000
47,952,000
46,661,470
4.1 x
12.9 x

25.77
12.8%
13.4 x
25.77
20.2x
13.4 x
39.06
8.8 x
2.8x
23.00
6.7%
3,088,287
3,088,315
8.74
39.4 x
344.00
120,000
41,280,000
38,940,951
3.4 x
9.1 x

29.96
16.3%
11.1 x
na
na
na
45.02
7.4 x
na
24.00
7.2%
3,755,529
3,755,868
1.29
nm
332.90
120,000
39,948,000
37,453,570
3.1 x
7.7 x

34.15
14.0%
9.7 x
na
na
na
55.17
6.0 x
na
24.00
7.2%
4,018,632
4,019,064
9.48
35.1 x
332.90
120,000
39,948,000
36,315,371
2.7 x
6.5 x

41.96
22.9%
7.9 x
na
na
na
72.14
4.6 x
na
25.00
7.5%
4,883,773
4,884,205
15.69
21.2 x
332.90
120,000
39,948,000
34,432,030
2.3 x
5.1 x

11,754,046
3,804,084
2,956,746
(43,836)
2,912,910
34,638
(309)
4,563
(845,630)
2,261,263
2,261,263

11,197,152
4,120,303
3,220,484
(46,234)
3,174,250
279,044
(117)
421
(921,697)
2,531,480
2,531,480

11,519,891
4,602,816
3,613,771
(48,009)
3,565,762
91,810
(451)
4,839
(952,800)
2,741,995
2,741,995

11,563,854
5,195,832
4,286,300
(143,068)
4,143,232
175,350
(38)
(1,226,709)
3,091,835
3,091,835

12,060,002
5,691,454
4,872,897
(135,608)
4,737,289
197,538
(471)
(1,347,205)
3,595,430
3,595,430

13,206,090
6,519,980
5,579,374
(139,504)
5,439,870
213,568
(600)
(1,554,530)
4,098,308
4,098,308

14,833,080
7,814,707
6,752,927
(139,672)
6,613,255
333,047
(600)
(1,910,068)
5,035,634
5,035,629

2,517,244
2,132,118
986,882
215,813
5,947,508
897,497
1,813,195
4,134,313
4,134,313
(2,517,244)
4,134,313

2,485,174
1,928,704
1,252,068
1,296,651
7,052,472
1,059,802
2,212,451
4,840,021
4,840,021
(2,485,174)
4,840,021

1,290,530
1,746,241
1,130,140
2,243,616
6,476,801
652,962
1,277,590
5,199,210
5,199,210
(1,290,530)
5,199,210

2,339,049
1,308,619
1,111,409
2,195,827
7,045,005
627,179
2,357,975
4,687,029
4,687,029
(2,339,049)
4,687,029

2,494,430
1,472,910
1,227,425
2,150,569
7,431,253
859,198
2,028,794
5,402,459
5,402,459
(2,494,430)
5,402,459

3,632,629
1,654,373
1,516,508
2,143,125
9,056,928
1,130,488
2,436,161
6,620,767
6,620,767
(3,632,629)
6,620,767

5,515,970
1,935,616
1,703,342
2,151,785
11,446,077
1,269,764
2,789,676
8,656,401
8,656,401
(5,515,970)
8,656,401

2,913,609
494,835
(67,627)
2,845,982
(63,064)
(1,380,000)
1,470,545

2,715,618
72,850
(1,128,106)
1,587,512
(1,127,685)
(1,620,000)
(32,067)

2,735,614
(120,785)
(995,097)
1,740,517
(990,258)
(2,940,000)
(1,194,644)

3,183,705
394,146
(95,446)
3,088,260
(95,188)
(2,040,000)
1,048,518

3,845,628
(49,841)
(90,439)
3,755,190
(90,248)
(3,600,000)
155,381

4,150,261
(223,627)
(132,061)
4,018,200
(132,061)
(2,880,000)
1,138,200

5,031,671
(357,874)
(148,331)
4,883,341
(148,331)
(3,000,000)
1,883,341

6.5%
7.4%
32.4%
25.2%
24.8%
19.2%
79.9%
62.0%
58.4%
0.0%
-60.9%
0.0%
nm

-4.7%
9.0%
36.8%
28.8%
28.3%
22.6%
70.7%
56.4%
71.1%
0.0%
-51.3%
0.0%
nm

2.9%
12.3%
40.0%
31.4%
31.0%
23.8%
71.0%
54.6%
87.5%
0.0%
-24.8%
0.0%
nm

0.4%
16.2%
44.9%
37.1%
35.8%
26.7%
83.8%
62.5%
89.3%
0.0%
-49.9%
0.0%
nm

4.3%
14.3%
47.2%
40.4%
39.3%
29.8%
93.9%
71.3%
80.1%
0.0%
-46.2%
0.0%
nm

9.5%
14.8%
49.4%
42.2%
41.2%
31.0%
90.5%
68.2%
70.3%
0.0%
-54.9%
0.0%
nm

12.3%
21.6%
52.7%
45.5%
44.6%
33.9%
86.6%
65.9%
59.6%
0.0%
-63.7%
0.0%
nm

Page 2
Source: LLUB Annual Reports and BRS Research

BRS Equity Research

Q1 FY 16 Performance
Q1 FY 16

All figures in LKR 'mn

Q1 FY 15

Q4 FY 15

Revenue

3,120

2,812

2,958

YoY growth %

11.0%

-5.9%

7.8%

QoQ growth%

5.5%

2.5%

-1.3%

Cost of sales

(1,600)

(1,616)

(1,612)

Gross Profit

1,520

1,196

1,346

Gross Profit margin %

48.7%

42.5%

45.5%

Recurring Net Profit

986

743

713

BRS EPS as adjusted (LKR)

8.22

6.19

5.94

YoY growth %

32.7%

-2.7%

28.5%

QoQ growth%

38.2%

33.8%

-14.5%

NAV per share (LKR)

47.27

49.52

39.03

ROCE %

76.5%

61.7%

83.9%

ROE %

57.4%

47.1%

62.5%

EV/Sales (x)

2.9

4.0

3.4

EV/EBITDA (x)

7.4

12.3

9.1

Lubricant Industry Vs LLUB Sales and Market Share

LLUB Sales Quantity (KL)

Market share (%)

Qty (KL)

Total Market Sales (KL)

70

70,000

Market share

60

60,000

50

50,000

40

40,000

30

30,000

20

20,000

10

10,000

0
2010

2011

2012

2013

2014

Source: PUCSLand BRS Equity Research

www.bartleetreligare.com

Page 3

BRS Equity Research

Sensitivity of corporate tax rate to total return

We have used 28% tax rate as the base case, as the 17.5% proposed rate is yet to be legalised. Hence, we
have done a sensitivity to consider both scenarios.

FY 2016E

Tax rate

NP (LKR 'mn)

Forward PER(x)

Total return
(LKR)

Upside on TR

17.5%

3,959

10.1

364.10

9.4%

28%

3,595

11.1

338.56

1.7%

Source: BRS Equity Research

Valuations assumptions

Based on a free cash flow valuation we have arrived at a target price of LKR 314.56 . Our valuations are based
on the following assumptions:
WACC 12.2%
Terminal growth rate - 3%
Risk free rate 11.96% (previous - 9.95%)

Sensitivity of target price to risk free rate & growth rate

Risk free rate (Five year bond rate)

314.56
Growth rate

www.bartleetreligare.com

10.0%

11.0%

11.96%

12.0%

13.0%

2%

339.39

318.36

300.78

300.09

284.06

3%

359.47

334.85

314.56

313.78

295.54

4%

385.11

355.49

331.56

330.64

309.48

Page 4

BRS Equity Research

Financial Analysis
Income statement - Chevron Lubricants Lanka PLC
Year Ending 31st December

2012

2013

2014

2015

2016E

2017E

2018E

Net turnover

11,754,046

11,197,152

11,519,891

11,563,854

12,060,002

13,206,090

14,833,080

YoY growth %

6.5%

-4.7%

2.9%

0.4%

4.3%

9.5%

12.3%

Cost of Sales

(7,949,962)

(7,076,850)

(6,917,075)

(6,368,022)

(6,368,548)

(6,686,110)

(7,018,373)

YoY growth %

5.1%

-11.0%

-2.3%

-7.9%

0.0%

5.0%

5.0%

3,804,084

4,120,303

4,602,816

5,195,832

5,691,454

6,519,980

7,814,707

Gross Profit
YoY growth %
Gross profit margin
Other operating Income

Total SG & A expenses

YoY growth %
Total depreciation
EBIT including non-recurring items
Non-recurring items
EBIT excluding non-recurring items

9.5%

8.3%

11.7%

12.9%

9.5%

14.6%

19.9%

32.4%

36.8%

40.0%

44.9%

47.2%

49.4%

52.7%

12,294

7,061

13,140

10,900

7,103

8,000

8,800

(898,904)

(952,694)

(1,045,356)

(1,063,501)

(961,268)

(1,088,110)

(1,210,251)

15.2%

6.0%

9.7%

1.7%

-9.6%

13.2%

11.2%

(43,836)

(46,234)

(48,009)

(143,068)

(135,608)

(139,504)

(139,672)

2,917,473

3,174,670

3,570,601

4,143,232

4,737,289

5,439,870

6,613,255

4,563

421

4,839

2,912,910

3,174,250

3,565,762

4,143,232

4,737,289

5,439,870

6,613,255

YoY growth %

7.4%

9.0%

12.3%

16.2%

14.3%

14.8%

21.6%

EBIT margin

24.8%

28.3%

31.0%

35.8%

39.3%

41.2%

44.6%

2,956,746

3,220,484

3,613,771

4,286,300

4,872,897

5,579,374

6,752,927

YoY growth %

EBITDA excluding non-recurring items

7.1%

8.9%

12.2%

18.6%

13.7%

14.5%

21.0%

EBITDA margin

25.2%

28.8%

31.4%

37.1%

40.4%

42.2%

45.5%

193,983

278,927

129,033

175,312

205,345

212,968

332,447

3,106,893

3,453,177

3,694,795

4,318,544

4,942,634

5,652,838

6,945,702

12.8%

11.1%

7.0%

16.9%

14.5%

14.4%

22.9%

Income tax expense

(845,630)

(921,697)

(952,800)

(1,226,709)

(1,347,205)

(1,554,530)

(1,910,068)

Profit after taxation

Finance Income / Cost

Recurring profit before tax

YoY growth %

2,261,263

2,531,480

2,741,995

3,091,835

3,595,430

4,098,308

5,035,634

YoY growth %

13.7%

11.9%

8.3%

12.8%

16.3%

14.0%

22.9%

Earnings per share - unadjusted (1)

18.88

21.10

22.89

25.77

29.96

34.15

41.96

Earnings per share - BRS adjusted (2)

18.84

21.10

22.85

25.77

29.96

34.15

41.96

Source: Company Financial Reports and BRS Equity Research

Note 1: Based on earnings as reported (unadjusted for non-recurring) share data adjusted for splits and super gains tax
Note 2: EPS adjusted for share split, consolidations and non recurring information

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BRS Equity Research

Financial Analysis
Income statement - Chevron Lubricants Lanka PLC
Year Ending 31st December

2015

Q1 16

Q2 16E

Q3 16E

Q4 16E

2016E

2017E

2018E

Net turnover

11,563,854

3,120,035

2,854,901

3,016,504

3,068,563

12,060,002

13,206,090

14,833,080

YoY growth %

0.4%

11.0%

2.1%

0.6%

3.7%

4.3%

9.5%

12.3%

Cost of Sales

(6,368,022)

(1,600,212)

(1,473,102)

(1,652,526)

(1,642,708)

(6,368,548)

(6,686,110)

(7,018,373)

YoY growth %

-7.9%

-1.0%

-3.0%

1.9%

1.9%

0.0%

5.0%

5.0%

5,195,832

1,519,823

1,381,799

1,363,977

1,425,855

5,691,454

6,519,980

7,814,707

YoY growth %

12.9%

27.1%

8.1%

-0.9%

5.9%

9.5%

14.6%

19.9%

Gross profit margin

44.9%

48.7%

48.4%

45.2%

46.5%

47.2%

49.4%

52.7%

10,900

1,103

2,000

2,000

2,000

7,103

8,000

8,800

(1,063,501)

(221,924)

(237,092)

(249,185)

(253,067)

(961,268)

(1,088,110)

(1,210,251)

1.7%

11.7%

-9.0%

-13.7%

-19.8%

-9.6%

13.2%

11.2%

(143,068)

(37,256)

(32,821)

(32,781)

(32,750)

(135,608)

(139,504)

(139,672)

4,143,232

1,299,002

1,146,706

1,116,793

1,174,788

4,737,289

5,439,870

6,613,255

Gross Profit

Other operating Income

Total SG & A expenses

YoY growth %
Total depreciation
EBIT including non-recurring items
Non-recurring items
EBIT excluding non-recurring items
YoY growth %
EBIT margin

4,143,232

1,299,002

1,146,706

1,116,793

1,174,788

4,737,289

5,439,870

6,613,255

16.2%

30.1%

12.1%

2.4%

13.9%

14.3%

14.8%

21.6%

35.8%

41.6%

40.2%

37.0%

38.3%

39.3%

41.2%

44.6%

4,286,300

1,336,258

1,179,527

1,149,574

1,207,538

4,872,897

5,579,374

6,752,927

YoY growth %

18.6%

29.3%

11.5%

2.1%

13.0%

13.7%

14.5%

21.0%

EBITDA margin

37.1%

42.8%

41.3%

38.1%

39.4%

40.4%

42.2%

45.5%

175,312

44,310

53,286

54,504

53,245

205,345

212,968

332,447

4,318,544

1,343,312

1,199,992

1,171,297

1,228,033

4,942,634

5,652,838

6,945,702

16.9%

30.7%

12.7%

2.9%

12.9%

14.5%

14.4%

22.9%

Income tax expense

(1,226,709)

(357,391)

(329,998)

(322,107)

(337,709)

(1,347,205)

(1,554,530)

(1,910,068)

Profit after taxation

EBITDA excluding non-recurring items

Finance Income / Cost

Recurring profit before tax

YoY growth %

3,091,835

985,921

869,994

849,190

890,324

3,595,430

4,098,308

5,035,634

YoY growth %

12.8%

32.7%

9.1%

1.7%

24.8%

16.3%

14.0%

22.9%

Earnings per share - unadjusted (1)

25.77

8.22

7.25

7.08

7.42

29.96

34.15

41.96

Earnings per share - BRS adjusted (2)

25.77

8.22

7.25

7.08

7.42

29.96

34.15

41.96

Source: Company Financial Reports and BRS Equity Research

Note 1: Based on earnings as reported (unadjusted for non-recurring) share data adjusted for splits and super gains tax
Note 2: EPS adjusted for share split, consolidations and non recurring information

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BRS Equity Research

Financial Analysis
Statement of Financial Position - Chevron Lubricants Lanka PLC
As at 31st December

2012

2013

2014

2015

2016E

2017E

2018E

215,813

1,296,651

2,243,616

2,195,827

2,150,569

2,143,125

2,151,785

94,109

81,152

66,274

90,101

85,920

110,292

139,364

1,341

8,723

311,263

1,386,526

2,309,890

2,285,928

2,236,488

2,253,417

2,291,149

2,132,118

1,928,704

1,746,241

1,308,619

1,472,910

1,654,373

1,935,616

986,882

1,252,068

1,130,140

1,111,409

1,227,425

1,516,508

1,703,342

2,517,244

2,485,174

1,290,530

2,339,049

2,494,430

3,632,629

5,515,970

5,636,245

5,665,946

4,166,911

4,759,077

5,194,765

6,803,511

9,154,928

5,947,508

7,052,472

6,476,801

7,045,005

7,431,253

9,056,928

11,446,077

Non Current Assets

Property Plant & Equipment
Non Current Receivables
Deffered Tax Asset

Current Assets
Inventories
Receivables and Prepayments
Cash and Cash Equivalents

Total Assets
Equity and Reserves
Stated Capital

600,000

600,000

600,000

600,000

600,000

600,000

600,000

Retained Earnings

3,534,313

4,240,021

4,599,210

4,087,029

4,802,459

6,020,767

8,056,401

Shareholders funds

4,134,313

4,840,021

5,199,210

4,687,029

5,402,459

6,620,767

8,656,401

87,328
-

122,060
-

119,902
101,596

125,557
173,641

135,299
189,634

147,619
189,634

158,983
189,634

87,328

122,060

221,498

299,198

324,933

337,253

348,617

Trade and Other payables

897,497

1,059,802

652,962

627,179

859,198

1,130,488

1,269,764

Current Tax

468,370

490,590

403,131

711,599

844,664

968,420

1,171,295

Dividends payable

360,000

540,000

Non Current Liabilities

Defined Benefit Obligation
Deffered Tax

Current Liabilities

Bank Borrowings

1,725,867

2,090,392

1,056,093

720,000
-

2,058,777

1,703,861

2,098,908

2,441,060

Total Liabilities

1,813,195

2,212,451

1,277,590

2,357,975

2,028,794

2,436,161

2,789,676

Total Equity and Liabilities

5,947,508

7,052,472

6,476,801

7,045,004

7,431,253

9,056,927

11,446,077

Source: Company Financial Reports and BRS Equity Research

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BRS Equity Research

Financial Analysis

Cash flow - Chevron Lubricants Lanka PLC

Year Ending 31st December

2012

2013

2014

2015

2016E

2017E

2018E

2,917,473

3,174,670

3,570,601

4,143,230

4,737,289

5,439,870

6,613,255

43,836

46,234

48,009

143,068

135,608

139,504

139,672

Property, plant & equipment written off

1,090

1,034

123

167

(Profit)/loss on disposal of PPE

(4,563)

(420)

(4,839)

(258)

11,102

(2,506)

(5,379)

Cash flow from operating activity

EBIT
Depreciation

Provision for bad and doubtful debt

(Reversal of provision)/Provision for impairment on trade receivables

Finance income/expense adjustment
Defined benefit obligation
Operating cash flow before changes in working capital
Changes in Working Capital
Cash generated from Operations
Interest received

(102)
-

(280)
159,654

43,356

37,674

15,241

8,278

16,600

19,813

22,477

18,532

23,470

24,000

24,000

3,165,745

3,325,328

3,700,630

4,338,115

4,910,277

5,603,374

6,776,927

494,835

72,850

(120,785)

394,146

(49,841)

(223,627)

(357,874)

3,660,580

3,398,178

3,579,845

4,732,262

4,860,437

5,379,747

6,419,053
333,047

235,690

97,834

154,569

197,538

213,568

Interest paid

(309)

(117)

(451)

(38)

(471)

(600)

(600)

Denfined benefit obligation paid

(701)

(9,662)

(7,473)

(8,228)

(13,728)

(11,680)

(12,636)

(745,961)

(908,471)

(934,141)

(1,694,859)

(1,198,147)

(1,430,775)

(1,707,192)

Tax paid
Super gains tax paid
Net Cash from Operating Activities

2,913,609

2,715,618

2,735,614

3,183,705

3,845,628

4,150,261

5,031,671

(67,627)

(1,128,106)

(995,097)

(95,446)

(90,439)

(132,061)

(148,331)

4,563

421

4,839

258

191

Investing Activities
Purchase of property, plant & equipment
Proceeds from disposal of PPE
Short term investments uplifted & maturity

ST Investments made during the year

Net cash used in investing activities

(63,064)

(95,188)

(90,248)

(1,127,685)

(990,258)

(132,061)

(148,331)

Financing Activities
Short term loans obtained / (settled) to related parties

Dividends paid

(1,380,000)

(1,620,000)

(2,940,000)

(2,040,000)

(3,600,000)

(2,880,000)

(3,000,000)

Net Cash in financing activities

(1,380,000)

(1,620,000)

(2,940,000)

(2,040,000)

(3,600,000)

(2,880,000)

(3,000,000)

Increase Decrease In Cash and Cash Equivalents

1,470,545

(32,067)

(1,194,644)

1,048,518

155,381

1,138,200

1,883,341

Source: Company Financial Reports and BRS Equity Research

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BRS Equity Research

Top 20 shareholders as at 31 March 2016

Name of the shareholder

No of shares

1 Chevron Ceylon Limited

61,200,000

51.00

2 HSBC INTL NOM LTD-SSBT WASATCH FRONTIER EMERGING SMALL COUNTRIES FUND

6,133,248

5.11

3 Cigroup Global Markets Limited Agency Trading Prop Securies A/C

2,954,168

2.46

4 BNYM SA/NV- Blackrock Froners Investment Trust PLC

2,221,717

1.85

5 HSBC Internaonal Nominees Ltd-SSBT-Aberdeen Instuonal CommingledFunds, LLC

1,880,000

1.57

6 RBC Investor Services Bank- COELI SICAV I- FRONTIER MARKETS FUND

1,829,851

1.52

7 HSBC INTL NOM LTD-BP2S LUXEMBOURG-ABERDEEN GLOBAL FRONTIER MARKETS EQUITY FUND

1,812,968

1.51

8 BNYM SA/NV-NEON LIBERTY EMERGING MARKETS FUND LP

1,788,676

1.49

9 Caceis Bank Luxembourg S/A BARCA GLOBAL MASTER FUND LPOGIER

1,592,496

1.33

10 HSBC Internaonal Nominees Ltd-BPSS Lux Aberdeen Global Asian Small companies fund

1,445,487

1.20

11 Cargo Boat Development Company Limited

1,400,000

1.17

12 Renuka Hotels Limited

1,400,000

1.17

13 Nothern Trust Global Services London S/A VERDIPAPIRONDET ODIN EMERGING MARKETS

1,322,097

1.10

14 HSBC INTL NOMINEES LTD-BP2S LONDON- ABERDEEN ASIA SMALLER COMPANIES INVESTMENT TRUST

1,296,360

1.08

15 Mellon Bank N.A.- Florida Rerement System

1,068,603

0.89

16 Employees Provident Fund

1,007,958

0.84

17 HSBC INTL NOM LTD-SSBT PARAMETRIC EMERGING MARKETS FUND

1,001,814

0.83

18 Crescent Launderers & Dry Cleaners (Pvt) Ltd

1,000,000

0.83

19 CB NY S/A WASATCH FRONTIER EMERGING SMALL COUNTRIES CIT FUND

950,060

0.79

20 HSBC INTL NOMINEES LTD-SSBT-FRANK RUSSEL TRUST COMPANY COMINGLED BENEFIT FUNDS TRUST GNA-6QH3

904,539

0.75

Source: Q1 FY 16 interim financial statements

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BRS Equity Research

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