SriLankan Airlines, CEB, CPC record Rs30bn loss in first 4 months

July 10, 2017 (LBO) – State-owned carrier Sri Lankan Airline, main power supplier Ceylon Electricity Board and Ceylon Petroleum Corporation together have recorded a loss of 30 billion rupees in the first four months of this year, a treasury report showed.

Sri Lankan Airlines

The total loss of Sri Lankan Airlines increased by 55 percent to 9.52 billion in first four months compared to loss of 6.12 billion recorded in the same period last year.

The accumulated losses and the negative net worth of the airline as at the end of April 2017 reached 170 billion rupees and 116 billion rupees respectively.

Treasury has provided guarantees and letters of comfort in order support the Sri Lankan Airlines to secure the loan facilities until the restructuring process is concluded.

The accumulated commitments up to April 2017 stood at 29.92 billion and 210 million US dollars.

The report said 168 employees of Mihin Lanka (Pvt) Ltd have resigned under the VRS scheme offered while 124 employees were absorbed to SLA.

The government seeks to restructure Sri Lankan Airlines and expects to offer an equity stake and management control of the company with a view to turnaround the airline as a commercially viable entity.

Due to delays in selecting a suitable business partner, the cabinet committee on economic management has appointed a high level committee to study all options available for the restructuring.

Ceylon Electricity Board

The state-owned power utility Ceylon Electricity Board has recorded an operating loss of 16.59 billion in the first four months of 2017 compared to the loss of 5.78 billion recorded in the same period of 2016.

The total outstanding obligations to the banks of CEB in the first quarter stood at 31.74 billion rupees compared to 39.05 billion rupees at the end of April 2016.

The Treasury has provided 6.0 billion through a supplementary allocation to CEB to compensate for the additional cost incurred in utilizing high cost thermal power generation in order to provide an uninterrupted supply of power to the country.

CEB faced challenges due to dry weather condition prevailed in the country from the latter part of 2016.

Ceylon Petroleum Corporation

Increased cost of imports had a negative impact on the financial performance of Ceylon Petroleum Corporation, with the entity incurring a loss of 3.8 billion during the first 4 months of 2017.

It reported an operational profit of 37.6 billion during the same period in 2016.

Government has issued Treasury guarantees worth of 1,600 million US dollars as collateral to the Bank of Ceylon and Peoples Bank against the borrowings of CPC.

The depreciation of the rupee against the US dollar has resulted in the CPC incurring an overall exchange loss of 5.7 billion rupees during the first 4 months of 2017.