Total stock falls to six-year low on energy sector jittersFriday March 10 2023
Oil marketer TotalEnergies saw its share price drop to a six-year low on Thursday amid headwinds facing the fuel retail sector.
The company’s stock price was down 7.7 percent to close at Sh19.1 from Sh20.7 on Wednesday.
The fall of the share price to multiyear lows comes in the backdrop of interlocking sector challenges including limited access to foreign exchange and plans by the government to import oil into the country outside the open tender system (OTS).
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Already, oil marketers such as Rubis have disclosed difficulties in accessing dollars to ship in new fuel cargo leading to jitters over a potential fuel shortage in the country.
As a cure to the hard currency access woes, Kenya has sought a government-to-government deal with the United Arab Emirates which will see the importation of fuel on credit as a measure to contain the growing crisis in the foreign exchange market.
The oil marketers have subsequently petitioned against the plan at the High Court, citing their exclusion from the bidding process.
Moreover, TotalEnergies share price decline has coincided with accelerated foreign investor sell-offs from the Nairobi Securities Exchange this week in what analysts say has been the pricing in of a deeper global economic contraction than was earlier projected.
TotalEnergies posted a 53.2 percent decline in net profit through six months of operations to June 2022 at Sh794.6 million from Sh1.7 billion previously.
The halving of the marketer’s earnings was largely attributable to increased cost of sales which offset a 33.9 percent growth in net sales which resulted from higher fuel prices in the domestic market.
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“During the period, international oil and gas prices, while being volatile, have continued to rise due to market disruptions linked to geopolitical conflicts. These have exacerbated the upward trend of fuel prices in the country as well as working capital requirements of the company,” TotalEnergies said last August.