Lub-rref rebounds to profit in Q2

Lub-rref (Bangladesh), a publicly listed fuel and power firm that incurred losses in the first quarter, returned to profit in the second quarter of the current fiscal year.  

In the December quarter, it made a profit of Tk3.34 crore, with an earnings per share (EPS) of Tk0.23, almost double the Tk1.74 crore profit and EPS of Tk0.12 recorded in the equivalent period of the previous fiscal year.  

However, in the July-December period, its net loss stood at Tk2.76 crore, with a loss per share of Tk0.19, compared to a profit of Tk3.63 crore and an EPS of Tk0.25 a year ago.  

Regarding the deviation in EPS, the company stated in a stock exchange filing yesterday that it had gradually faced a decline in sales due to product shortages caused by banking cooperation issues.  

"Internal problems at Social Islami Bank and a prolonged market gap benefited competitors. To address this, the company engaged with bank officials for facility approvals, submitted the necessary documentation, and initiated a market reorganisation strategy. This strategy involved market analysis, re-establishment efforts, product updates, pricing reviews, automation, and rebranding," reads the disclosure.  

"These efforts aim to restore product supply, regain market position, enhance competitiveness, and improve EPS, ensuring long-term growth."  

In the September quarter, the company incurred a loss of Tk6.90 crore due to difficulties in opening letters of credit (LCs), increased finance costs, and the overall economic downturn.  

Explaining the decline in revenue and profitability, the company stated that difficulties in opening LCs disrupted the import of essential raw materials, affecting production efficiency. 

Currency depreciation and rising interest rates inflated costs, reducing profitability and operational capacity, while the economic downturn and intense competition from both local and international brands impacted market share and sales.  

In the July-December period, its net operating cash flow per share stood at Tk1.36, down from Tk1.40 in the same period of 2023.  

Meanwhile, its net asset value per share, with revaluation, stood at Tk37.14 as of December, compared to Tk37.42 in June 2024.  

Lub-rref is engaged in the manufacturing of lubricants and allied products at its factory. Its lubricant manufacturing plant is equipped with modern machinery to produce various types of lubricants, including automotive, industrial, marine lubricants, and grease.  

The company was listed on the stock exchanges in 2021. In the last fiscal year, it incurred a loss of Tk10.74 crore and paid a 1% cash dividend to its shareholders.  

Its shares closed at Tk15.80 each at the Dhaka Stock Exchange today.