February, 27 (LBO) – Lanka IOC, a unit of Indian Oil Corporation emerging from a subsidy and pricing battle with the Sri Lanka government, has turned an operating profit for the past quarter, but interest costs still kept the firm in the red. The firm posted operating profits of 185 million for the quarter ended December 2006, compared with a loss of 812 million in the previous six months, but interest costs of 510 million dragged the firm into the red by 326.7 million.
Managing Director K Ramakrishnan told LBO that the number also included exchange losses on dollar denominated debt to suppliers.
As at end December, the firm had 10 billion rupees in trade payables.
However the firm is due to get about 122 million rupees every quarter as interest income from 2-year bond it received it received as part of a subsidy-settlement from the Sri Lanka government, which will pad the bottom line in 2007.
A dividend is also expected from the common user facility it shares with state-owned Ceylon Petroleum Corporation, all of which may bring in about 300 million rupees.
Lanka IOC is emerging from a pricing and price-subsidy battle with government which at one time caused the firms pumps to run dry.
In June 2006 the governme