STO Revenue Climbs 27% to MVR 6.98 Billion as Fuel Margins Narrow
- STO's Q2 2026 revenue rose 27% quarter-on-quarter to MVR 6.98 billion, driven by elevated global fuel prices, with fuel accounting for 86% of turnover.
- Higher procurement costs narrowed the gross profit margin to 10.8% from 14.3%, and operating profit fell 12% to MVR 324.31 million amid increased impairment provisions.
- Net profit rose marginally to MVR 279.79 million, up 71% year-on-year, while cash holdings grew but current and interest coverage ratios weakened.
Higher global fuel prices drove a sharp expansion in State Trading Organization’s revenue during the second quarter of 2026, although rising procurement costs limited the impact on profitability.
STO generated revenue of MVR 6.98 billion during the quarter, up 27 percent from MVR 5.49 billion in the first quarter. Compared with the same period last year, revenue increased by 96 percent from MVR 3.55 billion.
Fuel accounted for 86 percent of quarterly revenue, leaving non-fuel operations responsible for the remaining 14 percent. STO attributed the increase mainly to higher fuel revenue as geopolitical tensions kept global fuel prices elevated.
The increase in turnover was accompanied by a rise in the cost of sales, which reached MVR 6.22 billion from MVR 4.70 billion in the previous quarter. Gross profit consequently fell four percent quarter-on-quarter to MVR 757 million.
STO said higher fuel costs reduced margins despite improved profitability across its non-fuel businesses. Based on the reported figures, the company’s gross profit margin narrowed to approximately 10.8 percent from 14.3 percent in the first quarter.
Operating profit declined by 12 percent to MVR 324.31 million from MVR 367.98 million. The company attributed the reduction to lower gross profit and higher operating overheads, including increased provisions for impaired receivables. These provisions rose to MVR 88.26 million from MVR 21.20 million in the preceding quarter.
Overall earnings were supported by a shift from net finance costs of MVR 37.32 million in the first quarter to net finance income of MVR 11.11 million. STO recorded MVR 71.33 million in dividend income from subsidiaries during the quarter.
Profit before tax increased to MVR 335.41 million, while net profit rose marginally to MVR 279.79 million from MVR 276.35 million. Net profit was also 71 percent higher than the MVR 163.25 million recorded in the second quarter of 2025. Earnings per share increased from MVR 245 to MVR 248.
STO’s cash and cash equivalents rose by MVR 311.28 million during the quarter to MVR 862.26 million. The company generated MVR 382.39 million from operating activities, while investment activities resulted in a net outflow of MVR 266.73 million. Financing activities contributed a net inflow of MVR 195.62 million, mainly through additional borrowing for working capital and capital expenditure.
Total assets reached MVR 17.82 billion at the end of June, while total equity increased to MVR 6.08 billion. Liabilities rose to MVR 11.74 billion, partly reflecting higher obligations to fuel suppliers. Trade and other payables increased from MVR 4.25 billion to MVR 4.89 billion during the quarter.
The company’s current ratio declined from 1.39 to 1.30, while its interest coverage ratio fell from 4.27 to 3.25, indicating greater pressure from financing requirements despite the improvement in cash holdings.
STO also completed the transfer of its retail pharmacies and related pharmaceutical operations to the State Pharmaceutical and Medical Supply Corporation during the quarter. The restructuring involved the transfer of 725 employees, leaving STO with a workforce of 1,881 at the end of June.
