KenolKobil posts Sh3.9bn half year loss

Oil marketer Kenol Kobil has posted a Sh3.9 billion loss after tax in the first half of this year due to foreign exchange losses and the rising cost of sales that ate into its margins.

The company posted Sh2.28 billion profit after tax in the six months to June last year.

On Friday the oil marketer said that it booked Sh4.2 billion in exchange losses in the six months to June, up from Sh842.6 million over the same period last year and this contributed the most to its loss.

(Read: Hedging likely to hurt KenolKobil profits, says investment bank)

It said that group sales rose by 24.7 per cent to Sh103.82 billion in the six months to the end of June this month from Sh83.23 billion posted over the same period in 2011

Cost of sales however rose by 32.2 per cent to Sh101.99 billion from Sh77 billion, a move that cut down its gross profit by 70.1 per cent to Sh1.8 billion from Sh6.1 billion.

“The most significant impact was the losses from foreign exchange hedges taken in the latter part of 2011 and in the first two months of 2012,” said the Kenol Kobil in a statement.

The oil marketer issued a profit warning in June this year saying its performance will be affected by lower international oil prices, forex losses and high financing costs in Kenya and regional markets.

It booked Sh1.13 billion in finance costs up from Sh448.8 million while administration and operating costs rose marginally to Sh1.8 billion up from Sh1.4 billion.