TotalEnergies Marketing Kenya Plc has posted a 14.09 per cent growth in net profit to Sh938.5 million in the half year ended June attributed to a reduced tax burden.
Its net profit rose from Sh822.6 million recorded a year earlier. TotalEnergies' net revenue rose 8.7 percent to Sh61.6 billion from Sh56.6 billion but cost of sales grew faster at 10.2 per cent to Sh56.9 billion from Sh51.6 billion.
This resulted in the gross profit falling to Sh4.7 billion from Sh5 billion. The Nairobi Securities Exchange (NSE) listed firm incurred a lower tax charge of Sh316.8 million –equivalent to 25.2 percent of the pre-tax profit— and led to the net earnings growth.
The company had paid taxes of Sh442.9 million amounting to 35 percent of the pre-tax profit the year before.
The standard corporate income tax rate in Kenya is 30 percent but the actual amount paid by a company can vary based on various factors including allowable deductions and deferred taxes.
The oil marketer's operating expenses grew 2.7 per cent to Sh3.8 billion in the review period from Sh3.7 billion the year before. "The increase in operating expenses is majorly attributable to inflation impact on local costs," TotalEnergies said of the results.
Net finance costs almost quadrupled to Sh1.52 billion from Sh396.5 million, with the saying this is due to increased cost of borrowing and higher working capital needs.
The company did not have any bank overdrafts in the period under review which reduced its current liabilities to Sh32.5 billion from Sh41.3 billion. It had overdrafts of Sh5.5 billion a year earlier.
Foreign exchange gains rose to Sh674.2 million, reversing a forex loss of Sh468 million the year before due to appreciation of the Kenya shilling against the US dollar.
Extra income from investment and other businesses including rental revenue rose 37.5 per cent to Sh1.23 billion.
"Other income increased to Sh1.23 billion from Sh895 million majorly due to investing activities, increased revenues from diversified investments in shops, food and services and income from partnerships with third parties in the period," TotalEnergies said.